Rambus (RMBS)

[lizvestor]

STOCK PULLBACK CREATES BUYING OPPORTUNITY IF MANAGEMENT RESTORE
2006-05-22 09:11 (New York)

Since the company received the positive verdict from the Hynix trial,Rambus stock has pulled back roughly 35% compared to the SOX index which has declined only 5% during the same time period. Although we are surprised at the magnitude of the pullback, we believe that management certainly contributed to the situation (1) with heavy insider selling, (2)lack of positive business announcements, (3) a large stock option grant
(8% dilutive) to employees, (4) miscommunication at the annual
shareholders meeting, and (5) 'defensive' signals rather than 'offensive'signals to the Street. Even though we are deeply disappointed in the waymanagement has conducted its efforts in the past six weeks, we believe that the stock is oversold at these levels. We see a couple of positive
catalysts ahead for investors to come into the stock at these levels.Therefore, we are recommending investors to get on board ahead of the expected release of court documents from the price fixing case in San Francisco, and ahead of the analyst day on June 2nd where we expect management to likely restore confidence in the investor community.