Monday, April 10, 2006

Rambus, Inc., is there a spin doctor in the house?

Jack Davis, writing for the Mercury News, told the world that in 2006 David Mooring, a former president of Rambus and a current member of its board has exercised options allowing him to purchase 1.2 million shares of which he has sold 87% - netting $23.2 million (pre-tax). The shares were sold pursuant to a plan setup in November 2005.

Mr. Davis also draws attention to the one month tenure on the board of directors by Dr. Pinto and the Robert Eulau resignation and the $7 million Mr. Eulua made selling shares on his way out the door. Note is made that Mr. Eulua retains 72,000 shares.

Is Rambus headed for a fall?

Among the 150 largest public companies in Silicon Valley, Rambus has the highest market-value-to-sales ratio, according to a Mercury News special report elsewhere in today's paper. Rambus ended Friday valued at $4.34 billion, 27 times its 2005 sales. That was almost nine times higher than the average valuation of the SV150 at the end of the first quarter.

Or does Rambus have a future that justifies the valuation?

If one decided based upon insider behavior, one would decide that now is a good time to sell.

Is there a doctor in the house?

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