Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
US Jeff - any new court documents - it seems we've had a lull. I'm anxious to hear from Judge Whyte and the CAFC and DOJ (but that could be a ways off) and then there's the EPO written ruling. I'm also anxious for the delayed VA2 hearing on the 27th. I can hardly contain myself.
Skeptic
"Virgina is all F'up. Don't expect a clean sweep."
We only need one, right?
Anyone notice any similarities here:
4/1/04 -- So Ordered: granting [602-1] motion by Infineon
4/1/04 608 ORDER granting [541-1] motion by Infineon to Strike the Industry Royalty rates
denying in part [527-1] motion by Rambus , Inc. to Strike Sections 2.2 and 2.3 of the Second Supplemental Expert Report of Joseph C. McAlexander
the Motion is DENIED respecting the Pltf's challenge to the portion of the report pertaining to geographic market, except to the extent noted on the record, the
Motion also is DENIED respecting the Pltf's challenge to the portion of the report pertaining to alleged anti-competitive effects absent a showing of market power,
DENIED to the extent the Pltf seeks to submit the supplemental expert report of Dr. William Huber respecting the claim terms First External Clock Signal and Second External Clock Signal
Perhaps all this is trivial - the big pieces are 17200, A/C Privilege, and what the CAFC decides to do, but it is frustrating. I think the worst damage Payne could do now is grant Infineon's second request for a stay pending the FTC appeal.
Skeptic
good article about DDR2 vs DDR found by Sabatino on Yahoo...
http://www.theinquirer.net/?article=15006
Threejack - are you interested in being the lead in a class action lawsuit against the FTC for taking kickbacks (speculation) and bowing to the agenda of Micron because of the rampant cronyism? Rambus could be looking at another 2 1/2 years of the FTC witch hunt hanging over their heads if the FTC were to do the politically motivated thing (bribe thing) and reverse McGuire's opinion.
Thanks Jeff - and if you hear anything from the secret room regarding Rambus in VA today, I would appreciate anything you could pass along. Thanks.
New litigation document dated 3/19/04 on Rambus website. It's a request for abeyance from the CAFC. The gist is that Rambus is asking the CAFC to hold off until Payne completes his "in camera" review and then go from there. It's funny because the whole tone of the request is that Payne hasn't changed his tune or his reasoning so that Rambus anticipates that the original petition to the CAFC will still be valid but may have to be ammended/suplemented to capture any new legal screw-ups by Payne. In fact, Rambus indicates they expect Payne to go even further than before and have Rambus turn over everything, related or unrelated, that they have to IFX.
I have a hard time believing that the CAFC won't step in here.
There are new litigation documents on the Rambus website and the appeal to the CAFC for a Writ and the corresponding response from Bryson has been removed. There is an amended motion to compel issued by Payne in which he states that Infineon’s request to pierce Rambus AC privilege based on inadequacy will be denied. He is still requiring Rambus to deliver documents they produced already vs Hynix and the FTC and Rambus has to produce the 27 documents that Rambus never previously disclosed. As for production of documents relating to document retention, Payne is considering it pending completion of in camera review.
So it appears to me that the CAFC is now back out of the picture. I think Stone is finally getting through that thick skull of Payne’s. If Payne denies IFX’s request for production of documents related to document retention, Rambus will be in great shape. I agree with Nuke John that 17200 is no longer a threat – IFX still has their affirmative defenses, but I think they will be sweating this one.
Thanks for the update - I wasn't privvy to the "secret room" discussions.
One thing you mentioned "One of the more interesting tidbits from yesterday is that Payne asked Desmarais if he would be willing to drop 17200 and Desmarais replied that he would have to confer with his client."
What's in it for Desmaris and his client if they agree to drop 17200 - why would they agree? Thanks.
Very interesting - thanks Jeff.
ORDER that for the reasons stated on the record on 3/16/04, the plaintiff may file a motion addressing whether it has established a prima facie showing that the defts engaged in spoliation;
3/17/04 -- Infineon Inc. [473-1] motion by Infineon Inc. to Stay Trail pending rulings in the FTC action against Rambus set at 2:00 3/26/04, [520-1] motion by Rambus, Inc.to Dismiss Rule 12 (b)(6) set at 2:00 3/26/04 before Judge Robert E. Payne (snea)
There's so much going on...
That sounds about right - Payne consistently denies Rambus' requests. I'm very anxious to see the transcript from the court hearing yesterday.
Any clue what this means from Jeff's update (Thanks, Jeff!)
3/16/04 581 Minute entry: Payne, J., Diane Daffron, OCR. Parties by counsel. Arguments had on Plaintiff's Motions to Compel. Motions denied. (snea)
Great read - here's a link
http://media.corporate-ir.net/media_files/NSD/RMBS/custom/Signed_Rambus.pdf
A few tidbits...
"In spite of this Court's (CAFC) ruling that, as a matter of law, there was no evidence that what Infineon claimed was fraud was in fact fraud, the District Court has continued on remand to order Rambus to produce privileged documents on the theory that the crime-fraud exception to the attorney-client privilege still applies to this case."
"This Court's (CAFC) analysis with respect to whether and to what extent a duty of disclosure existed at JEDEC has now been strongly buttressed by the results of a 54-day administrative hearing conducted by the FTC last summer."
"On remand, the District Court has essentially ignored this Court's (CAFC) holding that Rambus has not breached any duty of disclosure to Infineon and therefore could not have committed any fraud."
It seems as if Payne played right into Stone's hands by his outlandish order. Payne gave Stone the "abuse of discretion" he needed to petition for a Writ. Interesting to see how this plays out.
Calbiker - OT - I'm not familiar with the ADI story, but at first glance, it appears expensive at 55X trailing earnings. Any color on the co. would be welcome.
I sold most of my calls on Monday after fretting the whole weekend before about Payne's Feb 26th diatribe. The fact that he still refers to Rambus as fraudulent schemers bothers me. He can make a mountain of a mole-hill concerning shredding day if he wants to. There are two things I will need to see happen before I decide to jump back in fully: Payne deciding not to pursue shredding and not releasing Rambus privileged documents and the FTC commission declining to hear the appeal. Either or both happening will give Micron et al the incentive to delay settlement talks - a delay ranging from at least 6 months to as long as two years. If, by some miracle, both of these events occur in Rambus' favor, things will be looking very good.
I guess we wait and see if CC actually files an appeal and then the appellee can appeal and then appellate can rebut - if CC does appeal (which they have 30 days to do from Feb. 24th)- then it sounds like it will be 1-2 months before we get a sense whether the commission will actually hear the appeal. I still the think the commission must have the right to deny the appeal. This stuff is like reading greek - that's why we Nick over here, I guess.
Is it your understanding that the commission now has 30 days to decide to hear the appeal or not???
I know options and option exercising is being heavily debated on the Yahoo board, but I just looked on Bloomberg and noticed Elau and Danforth had sold more shares - Danforth sold another 40,000 and a couple other people Ed Larsen and someone else filed to sell ~500,000 shares. Someone mentioned that Danforth only has like 5000 options left. That doesn't inspire any confidence. If he felt strongly about future litigation success, there is no way he would exercise the lion's share of his options. Oh well - maybe I'm reading too much into it.
Where's our host?
There is something I don't understand about the VA trials. This whole thing is about SDRAM, right? Didn't the honorless Judge Payne throw out fraud on DDR because Rambus was no longer at JEDEC and even IFX's lawyer will tell you that IFX infringes Rambus patents, so why aren't we getting paid on at least DDR? Can't we break this out? Worst case scenario here is that Rambus can't collect on SDRAM (only .75% anyway) and Rambus can collect on DDR (5% or better for IFX and pals). There is nothing concerning fraud with DDR, right?
What am I missing???
New IFX vs Rambus litigation document. Payne is pursuing this spoilation accusation big time. He accepted Infineon's request for the release of privileged Rambus documents which will be reviewed in camera first to determine if Payne thinks there is anything there that shows that Rambus shredded documents knowing it was going into litigation with IFX. My prediction - Payne says yep - there was spoilation so yep there is fraud so yep IFX doesn't infringe due to Rambus fraud. This joker will not go away.
Any bets on which MM will cave first? I really think it is a matter of weeks, not months, before a settlement is announced. I'm leaning towards Hynix because Micron still seems antagonistic about the whole thing (i.e. Parker's remarks) and I think MU is still holding out hopes that the full FTC commission will come to their rescue. I can hear Appleton now - "Muris better come to our rescue - we're paying him enough." Disclaimer - pure conjecture on my part!
Rambus is holding their anti-trust card for now, but if "talks" don't work out soon, I think that card will be played - what better time than behind the momentum of the FTC case and DOJ investigation?
Another piece I really enjoyed was when McGuire said (I'm paraphrasing)that complaint counsel did not show intent to deceive nor could intent to deceive be inferred. I think this completely destroys IFX's arguments and affirmative defenses. I can't imagine that california fraud would have even more liberal definitions than that. I'm very anxious to see Payne's next move.
I wonder if even Payne will have the gall to allow IFX to pursue California fraud in the face of the overwhelming exoneration of Rambus from both the CAFC and the FTC. I don't think any of IFX's other affirmative defenses will get them anywhere either. There is still the issue of document destruction but what could Rambus be possibly hiding when McGuire notes that the entire DRAM industry was aware of Rambus patents and used their technology anyway. This is the most confident I've been in a long time that we are finally going to get an infringement verdict and then all the pieces will come together after that.
The worst and probable scenario in the IFX trial is more delay as Payne keeps his head in the sand and Rambus is forced to go to a higher court to get justice.
On another note - I wonder about the licensing deal Rambus signed with Samsung. It would not surprise me in the least to find out that they had signed a sweetheart deal like they did with Intel just to squeeze the other MMs. I wonder if they are getting fixed payments on SD and DDRAM no matter what happens in their infringement lawsuits. The good news is that Rambus stated that Samsung has to renegotiate any DDR2 licensing arrangements.
Anyway...
Can someone please translate this???
http://media.corporate-ir.net/media_files/NSD/RMBS/custom/021804OrderGrantingMotionForLeave.pdf
"How about them Patriots. Got me a home team in the SB. (One of six I can claim). "
Now that I can agree with - most of the other stuff you say I might agree with, I just can't understand.
Skeptic
Thank you very much for the informative reply. This makes my investment decision much easier. I hope your homework pays off for you.
Skeptic
Thank you very much for the replies and the link. I've scanned over the information on wirelessledger and I've come away with a couple questions: First, why is the last update from August 2003? - it seems kind of dated. Second, how long can/will this arbitration panel take assuming they wait on the Dallas court decision? Thanks again for the help.
Skeptic
Hi - I'm new to this board - someone mentioned it on the Rambus board and it piqued my interest. At first glance this stock seems awful cheap and the analysts covering it seem lukewarm on it so my guess is there is some uncertainty in its future. Would anyone care to summarize potential pitfalls and catalysts for the new year. What kind of numbers are we talking about for back payments from Samsung and Nokia? TIA for any and all input.
Skeptic
OT - Captain Bob,
I apologize in advance to the board for the OT question, but Captain Bob piqued my interest in IDCC. Is it the case with IDCC that they are currently suing Nokia and Samsung and if so, what is the sense that they will prevail in those lawsuits and a timeline for that resolution. TIA.
Skeptic
Cor,
Those links on Desai's research don't work for me - Is there any way someone could paraphrase or paste in the some of the elements of it?
TIA
Skeptic
If Rambus has intellectual property covering SDRAM, DDR, DDR2, RDRAM, and XDRAM, it seems that a 10% share of the computer-related piece is extremely conservative. I would think closer to 30% and then there are non-computer related pieces that Rambus is hoping to grab share of. My sense is that Elixe's estimates (near 700 million in revenue) are probably more appropriate for 2007. I think he estimated 4.5 a share in earnings which at a P/E multiple of 30 (conservative), puts the stock at around 135...
I may have misunderstood your quick estimates, but did you mean to say that they would have a 10% market share of computer related products in addition to the 25% of computers/processors? If so this leads to a vastly different number
250 bill *(.25+.1) * (.03) = 2.625 billion in revenue
I thought this was interesting
copied from Yahoo...
Mistake?
by: mkt_wiz2003
Long-Term Sentiment: Strong Buy 11/20/03 08:09 pm
Msg: 552088 of 552207
Maybe NOT …a South Korean newspaper (The Korea Economic Daily) http://www.hankyung.com/ reported today that Rambus and Hynix Semiconductor have been in discussions ever since the most recent CC ruling in the US and according to an undisclosed source (…aren’t they always?) the paper now claims that the two parties are very close to finalizing an agreement!
In fact, the article makes some not too subtle indications that it might even happen before December 18th, 2003.
Talk about a nice X-mas present …huh?
So, did someone jump the gun – after all tomorrow is triple-witching (options expirations) is it not?
M.
Aren't we still waiting for the first RDRAM heyday?
Hi Cor,
I think your skepticism is understandable and that is why I approached the valuation from a fairly conservative standpoint. I hardly think 15% or 20% penetration at 2-3% blended royalty is overly optimistic considering it's below any of the numbers Rambus management suggested.
Also because of the business Rambus is in, almost all additional revenue will flow straight to the bottom line - operating and profit margins will just get fatter and fatter as they grow. Also, eventually they won't have as many litigation expenses and eventually Samsung will revert to a pay per unit structure. I'm not sure how accurate your statement of half of the TAM for microprocessors going to Intel is...
The big assumption here of course is that litigation does for the most part go Rambus' way. But given that, I see a 3 bagger minimum in 3 years and a 6-10 bagger if everything goes their way. If nothing else, I would be willing to bet Rambus will be a better investment over the next three years than AMD.
Skeptic
A reasonable estimate...
I've seen some unreasonable estimates of future Rambus earnings both positively and conservatively (mostly excessively optimistic). I understand that you have to take Rambus management's estimates with a grain of salt, but let's examine a fairly conservative estimate of royalties in 2007. If we assume a blended roaylty rate in the neighborhood of 2% (conservative) and a market penetration at something less than 25% (20% or so) we would have approximately 1B in revenue in 2007. If we assume a blended royalty rate of 3% (average) and say a market penetration of 15% (probably conservative) we get about the same revenue.
Gross margins are at 92%
SGA and research expenses are averaging about 60 million a year which is the last line item for expenses on their income statement
Assuming gross margins stay at 92% and SGA and research (mostly the research component) grow at a reasonable 10% a year, you have ~85 million in operating expenses in 2007. There is no reason that operating expenses should grow at the same rate as revenue because they are collecting royalty payments.
So - this is my estimate of earning per share for 2007
Revenue 1 billion
Gross Profit 920 million
Operating Profit 835 million
Net income (40% tax rate) 501 million
Earnings per share of roughly $5.1 per share (98 million shares outstanding)
At a very reasonable P/E of 30, we have a price of $150 - a six fold increase from today's price.
Skeptic