Is Elpida Partnership Enough to Jumpstart Qimonda?

Yesterday, Qimonda AG (QI) and Elpida Memory announced that they have signed final contracts for a strategic technology partnership on joint development of memory chips [DRAM]. This is positive news for QI, but difficult to make a definitive analysis since no statements have been made concerning expected revenues from this partnership.

The only question for QI’s stock remains Infineon’s (IFX) next step with respect to their 76% ownership of QI stock. IFX has commented previously they are considering cutting their stake.

QI has been on a nosedive for the last year, freefalling from a 52-week high of $17.29. On yesterday’s news, the stock is up 4%+.

An IFX decision may actually serve as a positive catalyst for QI. In the options market, it appears as if someone is expecting a bullish move by September. Over 2600 contracts were traded on the September 5 call strike yesterday.

Meanwhile, over 3500 contracts are spread out among the June 5, 7.5, and 10 call strikes, and look set to expire worthless unless there is an unexpected catalyst that occurs in the next 9 days. The bid is zero for all three strikes, so the market makers are definitely expressing their sentiment on any further positive movement for QI in the short term.

Disclosure: none

Comments

[WarTwin]

This is some good stuff. I've been watching this QI story for a while now, trying to figure out what the best strategy would be using options. You've given me some great ideas!

[WarTwin]

This is some pretty good insight... where do you get your info?

[WarTwin]

Sorry for the doublepost...

[CLiHsing]

Qimonda has to switch to stack process. According to InSpectrum, trench is no longer competitive with stack at the latest process nodes. Qimonda's cost structure has become too high.