Tuesday, September 05, 2006

Rambus Inc., collecting more fans

American Technology Research initiated coverage of Rambus Inc., telling its customers to buy bus tickets and "swing for the fences."

American Technology Research (Amtech) plays in a little league park as compared to Fred Hager - the center field fence is a mere $68 per share. Is Mr. Hager calling his bench warmers?

Amtech says there are 3 scenarios investors should consider when valuing RMBS:

1) co is unsuccessful in its licensing and litigation strategy, which would value the current business at $8/; firm has assigned a 15-20% probability to this scenario;

2) RMBS is successful with its licensing and litigation strategy, but its forward royalty rates are reduced by remedy actions within the FTC; firm estimates the co could be valued at $42/share based on this scenario, and they have assigned a 35-40% probability to this scenario; and

3) RMBS is successful in its licensing and litigation strategy, resulting in forward royalties from the sales of various DRAM technologies; in this scenario firm could potentially value RMBS at $68/share; firm has assigned a 40-45% probability to this scenario.
The Mercury News article linked here.

Business Week Online article linked here.

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