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Hi Pruf - it's hard to argue with your long-term reasoning. This company seems to have more than its share of pivotal moments.
In random order:
The CAFC overturning Payne's initial findings in VA1
The Supreme Court deciding not to take up the case
Intel adopting RDRAM
Intel signing a multi-year cross-licensing deal with Rambus
Hitachi deciding to scrap litigation and signing on at the higher royalty rates
The expert findings in Italy suggesting that Micron does indeed infringe
McGuire's ruling (this is one of the few times I've made significant money on Rambus - to date - I think I've given it all back)
The Infineon settlement
I'm sure I'm missing some, but at the time, these events seemed likely to change the course for Rambus and finally get them on the path to worldwide settlements and peace across the land.
The point of my reminiscing is that I now see spoliation as the next pivotal event. I think I've posted previous diatribes on this very issue, but I really see the resolution of spoliation as the main determinant as to whether Rambus becomes the hero or goat in my portfolio. Every defense and counterattack by Rambus' adversaries hinges on spoliation and unclean hands.
The first step in the spoliation resolution is Payne. The only good thing about Payne is that he rules quickly so we don't have to wait long to be outraged by his shortsightedness. If we clear this hurdle, spoliation in Whyte's court does become an event that one could make some money on.
I'm not interested in anyone's views on God, Religion, and the Origin of Man
Amen Brother!!! I used to look forward to reading JA's posts but now he is the single biggest perpetrator of OT posts of the political and atheistic nature. I guess since he has sold his Rambus stock he feels it is ok to convert the Rambus TMF board into his own blog.
On the price erosion of Rambus stock - I don't believe it is due to someone whispering in some hedgie's ear. Look at what's happened over the past few months and you'll know why the stock continues to lose favor. Rambus is suing its former second biggest customer, Rambus settled with Infineon for far less than most had hoped, Payne could potentially be back in the picture, the FTC commission is allowing the record to be re-opened to admit new "evidence", Rambus suffered another defeat in Europe, there are no assurances that Rambus can resign Hitachi and Toshiba, Elpida and NEC are making fixed payments, and management continues to exercise options at every opportunity.
I know I'm regurgitating the same "morsels" of negativity, but if you look at it this way, it is obvious why the stock continues to head south.
Alot of my stocks seem to me to be primed for an end of the year rally esp. SNDK,ERES,IDCC, and NTGR. Any one of them and/or RMBS could explode. SNDK is already breaking due to it's deathgrip on the future of Flash memory.
I don't see EBAY in your list of holdings otherwise I think you'd have the whole Hager portfolio. Long_and_Leaping doesn't post much on the Yahoo MBs anymore. Actually, I can't stomach wading through that cesspool anymore so maybe he does still post. It's nice to see some of his picks actually going in the right direction because Rambus surely isn't. The only other name I was involved with was IDCC but I lost all my call premium when the arbitration news was announced and the stock actually traded down. I had a feeling the settlement amount would be underwhelming, but greed took over.
TMF does seem to be going the way of Yahoo. This may be the last bastien of civility and pertitent information regarding all things Rambus (with the exception of my off-topic and off-color posts of course).
That said, if the Payne subsides, I might just double-down and hope I draw that face card and hope further that the dealer, whose showing an Ace, doesn't have blackjack.
BTW - did anyone catch either of Babbling Bob's presentations? I assume nothing earth-shattering was revealed because the stock is still puking.
OT - thanks for the response. I owned RBOT at one point - I liked the technology but the stock price languished so I moved on. ISRG has had a hell of a run over the last two years but with it trading at an EV/EBITDA of 50 and a forward P/E of 65 and being at an all-time high, I think I'll hold off.
OT - Calbiker - what's on your hit list or shopping list for stocks these days? I think it was ADI that you had recommended before - anything else look attractive?
Noticed a motion by Samsung seeking partial summary judgment on the four claims at issue in the IFX trial based on unclean hands and Payne's spoliation ruling (although he never really ruled).
http://investor.rambus.com/downloads/2005-08-08%20Samsung%20EDVA%20Motion%20Seeking%20Partial%20Summ...
On the legal front, Payne is the scariest thing I see in the near term. I imagine he is sick to death of seeing Rambus lawyers in his courtroom, but at the same time, he wants to see the Rambus snake killed. I'm giving odds of 60/40 that Payne opts NOT to transfer this case.
What Payne does here will determine how big of an event or non-event the October trial/hearings on spoliation in Whyte's courtroom will be. One of my personalities (the cynical one which dominates all other personalities with regard to Rambus) can easily see a series of events which includes the FTC overturning McGuire, Whyte being nominated and transferred to an appellate court before October, Payne keeping the case in VA and granting Samsung's request for summary judgment and Hitachi and Toshiba deciding to try their chances in court instead of renewing leaving Rambus with no revenue, protracted legal battles and bills, and letting IFX off the hook for the additional 100 mill (or whatever that figure was).
The other personality (the silver lining one which only occasionally butts his head in) can see Hitachi and Toshiba renewing ala Elpida (fixed payments) because they are honorable Japanese firms - it can see the FTC bowing out gracefully with a slap on the wrist to Rambus (i.e. defining RAND - which Rambus would/could appeal), Payne having his fill of Rambus and letting Whyte do his thing, a ruling of no spoliation in October and Hynix deciding to settle shortly thereafter. Then, the house of cards comes crashing down and the infringers start throwing money at Rambus begging for only a 5% royalty rate.
Both personalities agree that greedy mgmt will continue to dilute my and Mr. Stuart's ownership and squander our hard-earned money (mine is hard-earned at least).
One other note - Treowth makes an interesting attempt to forecast revenue scenarios over the next few quarters.
Here's the link...
http://treowth.blogspot.com/
Ok - back to working for that hard-earned money so Tate can go on another shopping spree.
Do not consider 25% a small institutional base
Institutional ownership has decreased 2.7% quarter over quarter and if you back out PrimeCap and Vanguard's ownership, institutional ownership is a measly 11.87% the rest of which can be explained by Rambus' inclusion in the Russell and Nasdaq indices and the necessity for index funds to hold Rambus.
And I still consider 25% small - look at the following institutional ownership numbers:
QCOM 69%
MU 82%
ATI 68%
NVDA 60%
Cadence 91%
The closest comparison is IDCC and they are higher at 34%.
In addition to a gaping hole in IR, they have a gaping hole in Sales/Marketing given that the CFO, "Bumbling Bob", is the de facto speaker at every investor presentation.
BTW OT - I hope you weren't offended when I referred to you as a clown - I have a lot of respect for your opinion and I was poking fun at myself as much as you.
Unfortunately, with a quarter of the shares held by institutions and most of the rest held in Street name or by insiders, the number of individual shareholders is small and of scant concern to Rambus.
Little insitutional holding suggests that this is in fact a retail stock owned mostly by individual investors who buy this stock with the hope that Rambus will hit paydirt and the stock will double/triple overnight. The fact that this is a retail stock explains why the BOD can continue to lavish stock options on mediocre (that's a gift) mgmt and why Rambus can get away with no IR department and few press releases. They don't want to talk to the Tom, Dick, or Harry who owns a 100 shares. Perhaps if more institutions owned Rambus, we'd see a legitimate proxy fight to replace the BOD with members who are more fiscally conservative and not in bed with Tate et al.
Once again I wonder why Stuart Steele does not do himself a favor and take mgmt to task - he is losing hundreds of thousands every day while people like Laura Stark are collecting on his apathy.
The only positive I see with little institutional ownership is that there shouldn't be any dramatic drops due to their selling. Of the institutional ownership, I wonder how much is hedged with shorting?
Rumor that company will be acquired buy one of companies involved in Lawsuit.
If JAGfn.com is going to throw out crazy rumors, they could at least get their grammar correct (i.e. buy instead of by).
Only clowns like Threejack and me think Rambus is worth 1.32 billion when litigation expenses are surging and revenues are shrinking. Samsung revenues are gone, Intel revenues are set to disappear next year, Rambus still hasn't resigned Toshiba and Hitachi, and Elpida pays fixed royalties. The EU, the FTC, Micron, Hynix, and Samsung all want to bury Rambus and according to the experts (Elixe), XDR will never (hyperbole) see the light of day on a PC. And how about Nvidia and ATI - aren't they using Rambus technology for free. What's not to like? Oh - I forgot - the rampant insider selling.
Treowth - I know you think it's laudable that our new CEO is holding those shares but true confidence would be Harry not selling any (even for tax reasons). He hasn't invested anything in those shares - no risk capital - so who cares if he doesn't sell.
Man - how did I get on this tirade...
oh yes - the rumor - if you throw the word rumor out there, it gives you license to make up any story you want. It's all about disclosure.
Anyway, the only entity I see acquiring Rambus (note I'm not saying buying) is the US government however they would call it a seizure of property, pay Rambus nothing, and then distribute the technology to Micron for free.
A little FTC update from July 20th...
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS: Deborah Platt Majoras, Chairman
Thomas B. Leary
Pamela Jones Harbour
Jon Leibowitz
__________________________________________
)
In the Matter of )
)
RAMBUS INCORPORATED, ) Docket No. 9302
a corporation. )
__________________________________________ )
ORDER REOPENING THE RECORD TO ADMIT INTO EVIDENCE THE
SUPPLEMENTAL EVIDENCE FILED BY THE PARTIES IN ACCORDANCE WITH
THE PROVISIONS OF THE COMMISSION’S ORDER OF MAY 13, 2005, AS
AMENDED, AND DIRECTING BRIEFING OF ISSUES RELATED TO SUCH
SUPPLEMENTAL EVIDENCE
On June 17, 2005, Complaint Counsel and Respondent separately filed supplemental
evidence in accordance with the terms of the Commission’s Order of May 13, 2005, as modified by
the Commission’s Order of June 13, 2005 (hereinafter “the supplemental evidence”). After having
first consulted with each other, Complaint Counsel and Respondent each filed a response to the
filing of the other, neither of which raised any objection to the admission into evidence of the
supplemental evidence. The Commission has determined that it should (1) reopen the record to
admit into evidence the supplemental evidence and (2) order additional briefing and other
proceedings in light of the admission of such evidence. Accordingly,
IT IS ORDERED THAT the record in this proceeding shall be, and it hereby is,
REOPENED to admit into evidence the supplemental evidence; and
IT IS FURTHER ORDERED THAT:
1. On or before August 10, 2005, Complaint Counsel and Respondent shall each file
amended proposed findings of fact and conclusions of law in light of the
supplemental evidence, and provide cross-references to the earlier proposed
findings of the parties and to the related provisions in the Initial Decision;
2. The amended proposed findings required by Paragraph 1. of this Order shall also
include the identification of any misstatements or misrepresentations of fact that
may have been previously made by any person during the course of this matter that
can now be identified by reason of the supplemental evidence;
3. On or before August 10, 2005, Complaint Counsel or Respondent may file any
motions seeking additional relief or inferences resulting from or relating to any
alleged spoliation of evidence by Respondent; and
4. On or before August 17, 2005, Complaint Counsel and Respondent shall each file
their responses, if any, to the filings required or permitted by Paragraphs 1. or 3. of
this Order.
By the Commission.
Donald S. Clark
Secretary
ISSUED: July 20, 2005
JAGfn Rumors
Monday , July 25, 2005 09:39 ET
Jul 25, 2005 (JAGfn.com via COMTEX) --RAMBUS INC DEL COM (RMBS)$13.45. Rumor positive news for company on litigation front
That's just me trying to pump up the stock - me and Geoff - he's got more options to exercise.
having said this, I still believe (and hope) the samsung trial will be moved to ca
I really think Payne has had his fill of dealing with Rambus and from my limited understanding, I don't think he can just throw it out like he was going to do with IFX because this is a "different" case. If it does stay in VA, let's hope Whyte has a chance to dismiss any notion of spoliation (if that's the way he sees it). Given the amount of information that Rambus has produced, albeit tardily, I find it hard to believe anything was destroyed that should have been retained. October could prove to be pivotal - the FTC, Samsung, Micron, and Hynix are all relying on spoliation to win their cases. It would also be nice to know that spoliation wouldn't be used as a defense in the AT case as well.
That said, the cc was blah (from what I read) which is typical for Rambus - no new licensees or other goodies announced after the close. Mgmt still thinks its ok to use Rambus' shareholder money to lavish themselves with options. I'm not sure I understand what Hughes was saying about just exercising enough options to cover taxes. Option grants in themselves are not taxable events - he must have already exercised some. I still don't understand how an individual (namely Stuart Steele) who owns over 7% (from memory) of the company can stomach the insider bullsh!t.
As an aside, IDCC, after years of litigation, finally won arbitration with Nokia and the stock price went down. Is that what I have to look forward to if we ever did get resolution?
I am making a promise to myself right now - if Rambus does not get a clean victory (i.e. dismissal) on spoliation in the Hynix case, then I am moving on to less risky ventures - maybe airlines or biotechs or Russian debt.
OT ELAN
I can't help chiming in here - talk about risk - IMO, the chances of Tysabri having 1/10th sales that ELN had originally dreamed are far less than the chance that ELN goes bankrupt. For ELN, this is an all or nothing deal. Patients with Crohn's disease won't touch it despite the recent phase III results and only the sickest of the sick MS patients will spin the roulette wheel.
There had been predictions of revenue from Tysabri (before the split with BIIB) of 3-5 billion. I would be surprised to see it break 500 million now and ELN only gets half of that. Their pipeline is somewhat thin and they are highly leveraged. I expect the FDA will allow it to be sold once more (although the FDA never really banned it - the companies agreed to take it off (actually BIIB insisted despite ELN)).
If you want to play Tysabri, buy BIIB.
I'm apt to think this strategy by AMD might actually aid their cause - Intel, like Mister Softee, is seen by many as an evil empire which does its best to bury any and all competition. I can't remember if there jingle is "Intel Inside" or "Resistance is Futile". Although the DOJ investigation with MSFT actually went nowhere (the europeans seem to be taking a harder line), it is still nice to rattle the behemoth's cage and let them know that big brother is watching (although he's probably going to continue to sit on his duff as long as you donate to his campaign).
The reason this would not work with Rambus is the genuine dislike a lot of people seem to have for IP-only companies. It's an unfortunate truth - it doesn't seem to pay to innovate - it pays to implement (i.e. steal) someone else's innovation and pay off some politicians.
JMAO
A - Anarchist
For some reason, I didn't see your post until today. I'm afraid I would be an unreliable assistant at best although I expect I'll have some position in the stock for years to come. I'm expecting twins any day now bringing the grand total to four kids which is more than I ever dreamed of having and frankly I'll be surprised if I have time to tie my shoes much less contribute on any level to anything "extra cirricular". See - I'm so frazzled, I'm already writing run-on sentences.
Besides, you do such a great job all by yourself!!!!
He states that the odds of IDCC getting something to be 80% yet all of his scenarios has IDCC getting something...lol
If you work out my math where I arrive at 21.92 per share based on a probability weighted guestimate, you will notice that I factored that in. In other words, the percentages I used in the second half of the exercise are adjusted for the 80%.
Scenario 1 = 25% * .8 or 20%
Scenario 2 = 50% * .8 or 40%
Scenario 3 = 10% * .8 or 8%
Scenario 4 = 15% * .8 or 12%
then I multiplied those percentages by the mid of my price estimates for each scenario...
OT
"Fight your own demons ; )"
I think that's sage advice.
As a good friend of mine likes to say, "I wouldn't be paranoid if everyone wasn't out to get me."
I'm trying to figure out out to juggle hopping back on the wagon, ending my chain smoking, dealing with my oedipus complex, and coping with my love/hate affair with Rambus all at the same time.
I'm not sure if I need a psychiatrist or an exorcist. ;>
or has your DETAILED analysis provided for recurring 2G revenue for 2005 through 2006? TIA
I'm not sure if the caps on the word detailed was meant to denote sarcasm, but this really was a back of the envelope calculation building off someone else's leg work (bulldzr).
One assumption in the numbers is that IDCC is currently trading at an appropriate value as we head into this one-time event so the answer to your question is that I'm just trying to estimate what the share price will be immediately after the news is released.
Let's take this analysis a step further - let's add some "odds".
First, I place the odds that IDCC gets "something" at 80%. Should IDCC get nothing, I expect a quick trip to $8.
Now, let's use bulldzr's scenarios and add odds although I am going to change the price ranges to reflect my best guesses:
$100M w/ no 3G: $19-21 (this will be viewed as neutral)
odds 25% (we're adding 2 bucks per share in cash)
$200M w/ no 3G (likely imo): $23-25
odds 50% (we're adding ~4 bucks per share in cash plus some hysteria factor)
$400M (as some believe) w/ no 3G: $28-$32
odds 10%
$200M with 3G: $32-40
odds 15%
Now, we can estimate a fair value for this thing based on the odds...
I come up with 21.92 so it looks like a buy to me, but I'd probably stick with 20 strike calls.
John Danforth, Rambus's general counsel, said Samsung's suit had several problems with its "legal theory" and said that its claims should be heard in California, not in Virginia.
I'm quite sure they'll move to have it consolidated in CA. Let's hope Payne is done with Rambus which he intimated toward the end of the IFX trial.
Threejack - what keeps you in the game? Why stick with Rambus?
I would think we can rule out a couple of reasons but please correct me if I'm wrong. I would say it's not because you believe in mgmt or think they are one of the most competent teams out there. I would say it's not because you like the risk profile of this stock. I would also guess it's not because you are excited about the technology considering you're a self-proclaimed TK (although your understanding exceeds mine).
Is it because you enjoy the drama? Because you've been in the stock so long you figure it has to pay off someday? Is it because you so graciously administer this board and would feel bad calling it quits? Perhaps you enjoy reading legal briefs and this sates your desire to become a patent attorney. Perhaps you enjoy cheering for the underdog or maybe you are married to the notion that there is justice in this world and that eventually Rambus will be vindicated and you intend to be there when they are. Or are you simply a masochist?
The purpose of this inquiry is that you seem to have such conviction and resolve and I'm looking for a little of that faith. I'm looking for a rational reason to stay in but I'm afraid my reasons are mostly emotional and not logical.
It's disheartening to see the amount of litigation ramping up instead of winding down - the litigation section on Rambus' website is extensive and growing. We have Samsung vs Rambus in VA and Samsung vs Rambus in DE and Rambus vs Samsung in CA. Then there Micron vs Rambus and Hynix vs Rambus. Then we have the FTC vs Rambus and the EU vs Rambus. Then there's Rambus vs Hynix/Nanya/Inotera/Samsung and finally the AT suit of Rambus vs Micron/Hynix/Samsung.
I know everyone here is aware of all this but it's unfortunate that an innovative IP company would get more hits on the litigation portion of its website than any other (my guess). Adding to my frustration is the obvious political machine at work and the ability of Micron to "buy" the federal and European governments and sic them on Rambus.
My gut tells me that the Samsung trials in DE and VA are going nowhere and that Rambus will triumph in San Fran but at what cost to me and my wallet??? I'd feel a lot better if mgmt was in the same boat but why should they disembark from their yacht and hop into my dinghy.
I HATE THIS COMPANY!!!
You believe there'll be a 400% increase in earnings in 18 months?
The only way this will happen is if there is a settlement. Litigation costs aren't going down anytime soon. Samsung revenues are gone. It would be great to have a court of law tell Hynix, Micron, and Samsung that they owe Rambus back royalties but it will be even more important for Rambus to sign these guys on for future royalties. Cash is valued at cost whereas earnings are attributed a multiple.
Guess talks broke down - now I'm worried.
Form 8-K for RAMBUS INC
--------------------------------------------------------------------------------
15-Jun-2005
Other Events
Item 8.01 Other Events.
Rambus Inc. ("Rambus") today announced the commencement of additional litigation between itself and DRAM manufacturer Samsung Electronics Co., Ltd. ("Samsung") which follows Rambus' June 6, 2005 filing and amendment by Rambus of certain patent infringement cases against Samsung in the United States District Court for the Northern District of California.
Subsequent to that California filing by Rambus, Samsung filed suit against Rambus in the Eastern District of Virginia on June 7, 2005. Samsung's Virginia filing seeks a declaration of invalidity of the four Rambus patents previously at issue in the Eastern District of Virginia in Rambus' now-settled litigation with Infineon Technologies AG. The Samsung suit also challenges the enforceability of the four Rambus patents on grounds that Rambus allegedly spoliated relevant documents and misused information from JEDEC, a standards setting organization for the solid state industry.
On June 15, 2005, Rambus added Samsung to Rambus' existing antitrust lawsuit against DRAM manufacturers Hynix Semiconductor, Inc. ("Hynix") and Micron Technologies, Inc. ("Micron"), which was originally filed in April 2004 in the Superior Court of the State of California for the County of San Francisco, by substituting Samsung as one of the previously named "Doe" defendants. Rambus took this step after a series of other developments, which included Hynix's plea agreement with the United States Department of Justice (the "DOJ") promising cooperation in the DOJ's investigation of a possible DRAM industry conspiracy to fix RDRAM prices and otherwise eliminate competition in the 1999-2002 time period, and following Rambus' recent receipt of certain documents previously provided to the DOJ by Hynix and Micron in connection with the DOJ's ongoing criminal investigation.
Losing faith?
I'm surprised to see admissions from die-hards on the TMF board, such as JA and doxiemom, that they are greatly reducing their holdings. I guess the Rambus tragedy has taken its toll on some of the stalwarts. I've got a position although it isn't my entire portfolio and I question the prudence of maintaining that position everyday, but for some odd reason I'm not as pessimistic as I usually am.
The delay and option exercises are the killer here but I think the crap at the FTC will be over soon and the issue of spoliation will be over soon and I think Samsung and Rambus will come to an agreement without dragging in Lucifer's Legions.
It makes me nervous that I'm the one arguing for the silver lining - be warned.
The market is not reacting too much to the news and when I read it, I was kind of like - no big deal. I think the pursual of a Virginia venue is a dead- end for Sammie. Payne is sick of Rambus - he expressed his interest in shipping the whole case to the West Coast with IFX. Furthermore, there should be a ruling out of Whyte fairly soon on spoliation - if Whyte truly plays by the book, he will take direction from the Supreme Court and dismiss any notion of spoliation especially seeing how they recovered gigabytes of data - what was destroyed? Their document retention far exceeds that of most companies.
Sammie wants a ruling of unenforcability and invalidity because of fraud and spoliation - no fraud says the CAFC and if Whyte says no spoliation then what?
Sammie is just trying to get a better deal for themselves - who can blame them? I really think Rambus and Samsung will come to an understanding before it goes to court and I think Sammie will get a deal that is almost as good as IFX's but still more than they were paying Rambus on a flat fee. Danforth's and Sammie's public statements are blatant in their amiable content.
The other interesting development is the return of NicdaGreek - I agreed with his initial pessimistic assesment but now I think he is on an agenda inspired by his position in the stock and one can no longer rely on his experience and objectivity. His posts seem less rational and consistent although I am definitely the pot calling the kettle black here.
One last thing on VA - I thought that old codger Payne was retiring? He is another example of why we need term limits for judges. The old "wait until they die" model put forth by our founding fathers was fine when the average male only lived until 55 (or less). Some of today's justices are too senile to realize they should have stepped down 10 years ago.
Here's to Bobby Payne's health!!!!
I'm glad NicdaSkeptic (I mean Nicdagreek) posted the following on TMF because it saves me the time and energy - his thoughts correspond well with my gut reaction to the news. I think we are now entering the next phase of the story: 2010 A Rambus Litigation Odyssey Every year I try to predict an end to the Rambus saga - last year I predicted 2006, now I'd say 2008 but in reality the saga will likely never end because manufacturers will always balk at the idea of compensating inventors.
I've never thought Samsung was our ally just as I don't believe Intel is our friend. I feel like with both firms, Rambus sold it's soul to the devil and now, with this news, they are trying to sue the devil to reclaim their chance at eternal salvation. The amusing thing is that if any member of society could go toe to toe with Lucifer, it's the lawyers although it may be difficult to differentiate the two.
We must never forget the golden rule when it comes to business "screw/sue your neighbor before they screw/sue you".
One last thought before I post Nic's comments... I wouldn't place too much faith in Mr. Steele's comments or his interpretation of this news. He may be healthy and weatlhy but I'm not so sure about wise. From what I know, he has never done anything to slow the tide of free money passed out to insiders and as the largest shareholder, he is the one hurt the most by the lavish grants. And one would think that owning a large portion of the company would have given him the insight to not ride this puppy down from 100 to 15 where it is now. Some intelligent people and successful businessmen are poor stock pickers and some wealthy people are more lucky than talented.
I'm sure my presence will about as welcome as the plague, but here goes.
I realize people are very gung ho and glad that the home team is striking a posture to defend the homeland. Sammy has now gone from hero to pariah (well, if you had reading my posts from 3 years ago, you would have seen the prior idolatry was not deserved, but that's another story...)
I only have one basic thought to pass around for consideration: when? has litigation ever helped Rambus?
Surely not in Germany where they lost the patent to the EPO? Or Italy where they got no infringement against MU?
Surely not with IFX, who got the (steal) of the century?
And the FTC is not anywhere complete yet. What will they do, too, if the want to bastardize and extrapolate from the IFX settlement?
.....
Sure, we have some SJ with Hynix in San Jose. But, that case is still very much in the middle game, and the appeal is years away. The CAFC has a 50% reversal rate. So, the endgame is completly unkwown.
Maybe it is just me, but I have to say that this failure to sign Samsung to a new deal simply goes to show that, contrary to the prior opinions I see here, Rambus management has learned very little from history. As I see it, despite having hundreds? of potentially relevant patents, they are unable to convince anyone else of the reasonableness of their demands, or the brilliance of their logic. Such failure of closure/persuasion while holding all the presumed ace cards just smacks of ... incompetence?
Maybe all of this is nothing, and we will have a surprise settlement that resolves everything. But from all indications, I submit we are 1 year now into the 7 years of famine I alluded to long ago. This action by Samsung will simply confirm for the MUs of the world as well that the correct approach with Rambus is to litigate with them to the end.
But if everyone here is satisfied with increasing legal costs and diminished revenues for the indefinite future, then this is the stock for you. The only ones making money from all this craziness are.... lawyers and insiders. And both are stroking each other, if you know what I mean.
Good luck to you all, this story has become somewhat more... conventional (legally) and unsatisfying (from an investment perspective) as there are lots of other really promising - as in more immediate possibility of return - stocks.
Da Greek
PS: I really am preoccupied with other things, so please forgive any non-responses for awhile. I am not ignoring anyone, I just don't have time - at this moment - to address each issue that gets raised here. So don't take it personally...
Cor - I believe AT suit is correct - notice this line...
14. Rambus does not have the requisite antitrust injury to bring antitrust claims against Hynix under California B&P cose # 16750(a).
I believe each defendant in the AT case files its own responses and motions.
AT Suit update from msaba on Yahoo...
Hynix reply in AT suit . . . . . . . .
by: msaba 05/25/05 09:19 am
Msg: 774393 of 774396
1. The 1994 licensing agreement calls for arbitration, and precludes litigation of Rambus’ claims.
2. Rambus’ claims, if they have any merit, are compulsory counterclaims in Whyte’s case. And therefore Rambus is barred from asserting them in this court.
3. The 1994 agreement has a limited liability clause.
4. Spoliation denied Hynix the ability to defend itself.
5. Some causes of action are barred by the statute of limitations. Some two years and some four years.
6. Laches: Rambus knew of the allegations long before it asserted the claims, prejudicing Hynix.
7. The alleged conduct was performed by Hynix personnel in their capacity as officers of trade organization, and were designed to enhance competition.
8. Hynix actions were privileged and justified as competition.
9. Hynix actions were to protect their legally valid interest.
10. Any monetary damages awarded by this court should be offset by Hynix claims against Rambus under California code of civil procedure # 431.70
11. By conduct, representation and omissions, Rambus has waived and is equitably estopped to assert.
12. Rambus did not exercise care, caution and prudence. Therefore barred, or the recovery should be proportionally reduced.
13. Any harm that is alleged was not the result of the conduct of Hynix, but, if any, was caused by unsued third parties.
14. Rambus does not have the requisite antitrust injury to bring antitrust claims against Hynix under California B&P cose # 16750(a).
15. Rambus failed to mitigate damages. Any recovery must be diminished or barred.
16. Failure to join necessary parties: Once a DRAM product is designed, it is easy to produce more of it. Some DRAM manufacturers decided to promote RDRAM. They had the capacity to satisfy the entire demand. Rambus was well informed of the production and pricing plans of all RDRAM licensees. If collusion occurred it was originated and carried out by manufacturers that intended to specialize in RDRAM, e.g. Samsung. Rambus has deliberately failed to join necessary parties to this action, e.g. Samsung.
17. Punitive damages violate Hynix due process rights under the constitutions of Cal, and the US.
Some more sickening statistics on Insider activity over the years...
Over the last 3 years, insiders have sold stock for gross proceeds of 109.6 million which compares to their 3 years of net income totalling 81.5 million.
Over the last 5 years, insiders have sold stock for gross proceeds of 176,974,159 while the stock price has gone from ~75 split adjusted to ~15 today.
Here are some of the highlights - again - my formatting stinks..
Mooring, Farmwald, and Tate win the prize for the most sold each greater than 50 million over an 8 year period or less. Danforth, Stark, and Eulau each being there less than 3 years have sold stock worth 4 million each.
I suppose I might just be jealous, but if something should happen to Bob Eulau, I'll be looking for his job - I know my speaking skills couldn't be any worse. I guess I should vote with my feet and sell my shares but I can't stop staring at the train wreck.
Insider Million Sold Years Million/Year
Davidow 28.7 6 4.8
Donnelly 10.5 6 1.8
Horowitz 40.2 8 5.0
Tate 52.3 8 6.5
Mike Farmwald 17.8 2 8.9
Samir 16.8 2 8.4
Eulau 4.2 2 2.1
Stark 3.8 2 1.9
Danforth 4.4 2 2.2
Mooring 53.2 4 13.3
Larsen 22.4 6 3.7
Paul Farmwald 52.6 6 8.8
Insider Activity Summary for the last year...
The formatting is a little hard to read so let me just summarize that since 6/1/04, there has not been a single insider purchase and the insiders have collectively sold 1,296,875 shares for gross proceeds of $23,131,662 which is as much as they actually earned in net profit in 2003. I'd say that's better than money growing on trees.
INSIDER PATTERN B/S SELL DATE SHARES PRICE HOLDINGS DOLLARS
p HOROWITZ MARK 0 7 D Sell 06/01/2004 26,660 $19.08 1,776,876 $508,672
p TATE GEOFFREY 0 6 CE Sell 06/21/2004 33,300 $15.98 3,066,822 $532,134
p HOROWITZ MARK 0 7 D Sell 07/01/2004 26,660 $17.21 1,750,216 $458,818
p TATE GEOFFREY 0 6 CE Sell 07/20/2004 33,300 $17.33 3,033,522 $577,089
o STARK LAURA 0 0 VP Sell 07/21/2004 10,000 $16.64 17,475 $166,400
p DAVIDOW WILLIAM H 0 6 D Sell 07/26/2004 20,000 $15.98 960,972 $319,600
p HOROWITZ MARK 0 7 D Sell 08/02/2004 26,660 $16.61 1,723,556 $442,822
p DAVIDOW WILLIAM H 0 6 D Sell 08/18/2004 20,000 $15.00 940,972 $300,000
p TATE GEOFFREY 0 6 CE Sell 08/20/2004 33,300 $13.23 3,000,222 $440,559
p HOROWITZ MARK 0 7 D Sell 09/01/2004 26,660 $13.04 1,696,896 $347,646
p DAVIDOW WILLIAM H 0 6 D Sell 09/15/2004 20,000 $15.00 920,972 $300,000
p TATE GEOFFREY ROSS 0 6 CE Sell 09/20/2004 33,300 $16.59 2,966,922 $552,447
p DAVIDOW WILLIAM H 0 6 D Sell 10/20/2004 20,000 $17.66 900,972 $353,200
p TATE GEOFFREY ROSS 0 6 CE Sell 10/20/2004 33,300 $16.80 2,933,622 $559,440
o STARK LAURA 0 0 VP Sell 10/21/2004 10,000 $17.77 17,475 $177,700
p HOROWITZ MARK 0 7 D Sell 10/26/2004 23,692 $16.63 1,673,204 $393,997
p HOROWITZ MARK 0 7 D Sell 11/01/2004 23,692 $17.12 1,649,512 $405,607
p DAVIDOW WILLIAM H 0 6 D Sell 11/15/2004 20,000 $19.29 880,972 $385,800
o PATEL SAMIR 0 0 VP Sell 11/15/2004 40,000 $19.45 82,930 $778,000
po EULAU ROBERT K 0 6 CF Sell 11/16/2004 60,000 $20.00 15,960 $1,200,000
p TATE GEOFFREY ROSS 0 6 CE Sell 11/22/2004 33,300 $21.13 2,900,322 $703,629
p HOROWITZ MARK 0 7 D Sell 12/01/2004 23,692 $23.52 1,540,820 $557,235
po EULAU ROBERT K 0 6 CF Sell 12/02/2004 10,000 $24.34 15,960 $243,400
p DAVIDOW WILLIAM H 0 6 D Sell 12/15/2004 20,000 $27.47 860,972 $549,400
p TATE GEOFFREY ROSS 0 6 CE Sell 12/20/2004 33,300 $25.69 2,898,556 $855,477
p HOROWITZ MARK 0 7 D Sell 01/03/2005 23,692 $23.09 1,517,128 $547,048
po EULAU ROBERT K 0 6 CF Sell 01/04/2005 10,000 $21.66 15,960 $216,600
p DAVIDOW WILLIAM H 0 6 D Sell 01/18/2005 20,000 $20.97 840,972 $419,400
p TATE GEOFFREY ROSS 0 6 CB Sell 01/20/2005 33,300 $20.82 2,865,256 $693,306
p HOROWITZ MARK 0 7 D Sell 02/01/2005 23,692 $17.99 1,493,436 $426,219
p DAVIDOW WILLIAM H 0 6 D Sell 02/15/2005 20,000 $18.58 820,972 $371,600
o PATEL SAMIR 0 0 VP Sell 02/17/2005 22,111 $18.02 82,930 $398,440
p TATE GEOFFREY 0 6 D Sell 02/22/2005 33,300 $18.15 2,831,956 $604,395
FARMWALD MIKE 0 0 D Sell 02/25/2005 200,000 $17.84 2,970,936 $3,568,000
p HOROWITZ MARK 0 7 D Sell 03/01/2005 23,692 $17.38 1,469,744 $411,766
p DAVIDOW WILLIAM H 0 6 D Sell 03/21/2005 20,000 $16.40 800,972 $328,000
p TATE GEOFFREY 0 6 D Sell 03/21/2005 33,300 $16.75 2,798,656 $557,775
p HOROWITZ MARK 0 7 D Sell 04/01/2005 23,692 $15.01 1,446,052 $355,616
p TATE GEOFFREY 0 6 D Sell 04/20/2005 33,300 $13.53 2,765,356 $450,549
p HOROWITZ MARK 0 7 D Sell 05/02/2005 23,692 $14.23 1,422,360 $337,137
o STARK LAURA 0 0 VP Sell 05/03/2005 20,000 $14.11 31,505 $282,200
DONNELLY KEVIN 0 8 VP Sell 05/05/2005 1,456 $14.24 27,268 $20,733
o DAVIDOW WILLIAM H 0 6 D Sell 05/06/2005 30,832 $14.07 800,972 $433,806
p DAVIDOW WILLIAM H 0 6 D Sell 05/19/2005 40,000 $15.00 760,972 $600,000
I have to admit to being a little confused as to the impact on Rambus in the short run or the long run by this FTC news. There have been some musings on TMF concerning the Hynix trial that the spoliation argument is spoliated by the newly discovered tapes - I wonder if the same logic would apply over at the FTC (although that presumes that the FTC actually follows some sort of logic).
With the addition of 4 terabytes of data covering a significant period of time, there is little room to suggest that Rambus actually destroyed anything. Could there be other damning info in those tapes - yes although Danforth has publicly suggested that there will be nothing in those tapes that will incriminate them.
As with Hynix, this means more delay which is the most frustrating part. I'm glad to hear Skip Oliva's motion will be heard - it is a travesty that the confessed criminals who brought this case against Rambus are still being ignored by the FTC.
I can't say I'm surprised by any of this but neither am I pleased.
Calypso wireless CLYW to demonstrated there new revolutionary c1250 phones in london next week , and follow with field trials with major usa and european carriers. IT WILL FLY !! next week !! good luck
Ahhh SPAM - now this feels like a real message board. I keep thinking that the FTC is about due to render some sort of judgment. The hearings ended about 6 months ago and there was a motion to compel production of documents posted almost two months ago. At a minimum, you would think we'd have an update on the latter. My guess is that the lack of word from the commissioners is either a factor of indolence or an inability to determine which way the political winds are blowing - no government official wants to spit into the political winds.
OT - Threejack or anyone - do you remember UncleWest - one of the most bullish ramboids from years back? Do you know if he fell of the bus or assumed another alias?
TIA
Threejack - I find the author's pieces on Rambus reminiscent of yours (the two most recent especially).
Great minds think alike.
http://treowth.blogspot.com/
Some Misc comments...
First - I've got a couple ideas on the "mystery employee"
Gordon Moore (Moore's Law)
Ulrich Schumacher (former IFX CEO)
Gregory Stone
Croaker Frog
Second - Elixe - I think you should be flattered that Calbiker continues to badger you - he must view you as fairly intelligent if he continues to challenge you although I'm sure his cantankerous nature can be grating.
Third and somewhat OT - IDCC had a mgmt shake-up last night and so I was perusing the Yahoo MB and noticed that two of the most adamant Rambus shorts are actually IDCC longs (Ramie and iammechanic) although they could be one and the same. The stock is getting creamed in early trading.
Rambus needs some good news on the Samsung and Intel fronts - that will energize the stock - there is still too much uncertainty about future revenues. Threejack - I was surprised to see how low institutional ownership actually is - this could be viewed two ways - if good news comes out, there is plenty of room for the big players to come in and bid up the price or the big players just don't care about Rambus in this will remain a retail stock.
Wells Fargo downgrade to sell...
EXECUTIVE SUMMARY
* Last night, InterDigital Communications announced the departure of both
the company's CEO, Howard Goldberg, and the company's COO, Charles "Rip"
Tilden. We believe that the board asked both men to leave the company and
that the departures were not voluntary. The board appointed William
Merrit, the company's chief legal executive, to the CEO position.
* Lowering rating from Hold to Sell. We believe that the departure of the
company's top two executives in such a sudden and unexpected manner
should raise concerns for investors regarding what is happening within
InterDigital.
* We cannot pretend that the signal sent from the management changes is
positive. The unusual timing and nature of both executive departures are
serious concerns that the company must address as soon as possible.
* The Nokia arbitration outcome could be negative. This management shake-up
in front of the company's 1Q call and so close to an expected
announcement from the Nokia arbitration raises our concerns about the
outcome of the arbitration and the future direction of InterDigital.
* We are lowering our EPS estimate from $0.22 to $0.10 due to higher
expected operating costs related to the management shake-up and Nokia
arbitration. Our revenue estimate rises from $138.9 million to $141.8
million due to higher revenues from General Dynamics in 1Q.
* We believe that investors should sell shares of InterDigital today. In
our view, it will be challenging for the company to provide a
satisfactory explanation for the sudden changes in management in the near
term. We think shares would be fairly valued around $10 under current
circumstances.
Disclosures are at the end of this research report.
Wells Fargo Securities does and seeks to do business with companies covered
in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of
this report. Investors should consider this report as only a single factor
in making their investment decision.
REPORT BODY
Key Executives Depart Suddenly
Last night, InterDigital Corporation reported that CEO Howard Goldberg and
COO Charles "Rip" Tilden were both leaving the company effective
immediately. William Merrit, the company's primary legal executive, has
been appointed CEO and appointed to the board of directors. We do not view
the departures of Mr. Goldberg and Mr. Tilden as voluntary. We are
surprised that, so close to the culmination of a critical arbitration
hearing with Nokia and another one with Samsung, Mr. Goldberg, a 12-year
InterDigital veteran, and Mr. Tilden, an eight-year InterDigital veteran,
would suddenly be let go. We believe that the significant changes in
management suggest that something within InterDigital has gone wrong.
Near-Term Events Key to Long-Term Outlook
We anticipate that this Friday's 1Q report from InterDigital will be a
critical event for the company to explain clearly to investors the
decision-making behind the senior management changes at this point in time.
InterDigital also needs to articulate significant strategic changes that
Mr. Merritt may or may not be considering. Despite our high level of
concerns over the odd events occurring at InterDigital, a successful
outcome of the Nokia and Samsung arbitration would lead us to become more
positive on the company's long-term prospects and potentially re-evaluate
our level of concern over management changes in that scenario.
Lowering Rating from Hold to Sell
We believe that it is incumbent upon InterDigital to provide greater
clarity to investors for the reasons behind the changes if the company
expects investors to retain their shares. We do not anticipate that
InterDigital will provide such clarity prior to the company's scheduled 1Q
conference call on Friday, May 6. Consequently, we are lowering our rating
on shares of InterDigital from Hold to Sell. We now believe that the
successful conclusion of the Nokia and Samsung arbitrations could be a much
less likely outcome than we had originally projected.
Fair Value Near $10
We believe that InterDigital shares could fall to a valuation below that of
the peer group of other intellectual property companies such as QUALCOMM.
In our opinion, shares of InterDigital could fall to roughly $10, or 21x
our FY06 EPS estimate of $0.47. At this level, shares would trade at a
significant discount to the peer group, and the company's cash position of
$2.39 per share would provide some downside protection to investors.
Adjusting Estimates to Reflect Updated 1Q Guidance and Management Shuffle
We are lowering our FY05 EPS estimate from $0.22 to $0.10 due to higher
expected operating costs related to the management shake-up and the Nokia
arbitration. Our revenue estimate rises from $138.9 million to $141.8
million due to higher revenues from General Dynamics in 1Q. The primary
driver of our new EPS estimates is significantly higher operating expenses,
based on our view that the continued legal work for the Nokia arbitration
and the inevitable disruptions and associated costs of the management
restructuring will add to the overall operating costs of the company. Our
new FY05 estimate for operating expenses is roughly $130 million, up from
roughly $121 million previously.
Valuation
InterDigital shares are trading at 36x our 2006 EPS estimate of $0.47,
based on yesterday's closing price. The average multiple for the company's
royalty peers is 25x FY06 EPS estimates. In our opinion, InterDigital
shares should not trade at a premium to the peer group given the
significant uncertainties and risk introduced by the high-level management
departures announced last night. We believe that InterDigital's shares
should trade at a multiple of 21x our FY06 EPS estimate, a sufficient
discount to the peer group multiple, in our opinion. Our valuation
methodology suggests a price target of $10.
Risk
* Wireless technology trends. InterDigital derives most of its revenue from
licensing IP. Any material unexpected change in the deployment, pace, and
growth of wireless technology-especially 3G and wireless data services
related to InterDigital's IP-could greatly affect the company's financial
performance.
* Customer wins. InterDigital depends on wireless manufacturers and OEMs to
monetize its IP. If InterDigital were to lose current customers or were
unable to gain new customers (due to competition or risk to R&D), its
financial success could be greatly affected.
* Royalty collection. There is no guarantee that InterDigital will be able
to collect royalties under existing license and settlement agreements or
derive revenue from patents. The company is particularly vulnerable to
nonpayment outside the United States and Europe.
* Legal risks. InterDigital could lose its lawsuits against Nokia or
Samsung and would therefore be unable to receive either past or future
royalty obligations. InterDigital would be especially affected if it were
to lose to Federal Insurance, as the potential loss of payments would be
equivalent to one quarter's sales.
I took first in a big mountainbike race.
I see we have our own resident Lance Armstrong. Mountainbiker by day, electrical engineer by night, and roofer/handyman somewhere in between.
From that same article - one of Desai's quotes struck me
"We have been under the assumption that many crucial documents would be 'protected' under the terms of any settlement with the DoJ," Desai said.
The proverbial "We" - if by We, does he mean he and his cohorts at Amtech or does he mean he and his financial backers, Micron and Hynix?