Mr. B

The Rambus Convertible Notes Offering

I must admit that the price reaction seems significantly overdone even recognizing that we remain in a secular bear market.

The earnings miss was roughly at the bottom of the guidance range provided by management. In addition, the condition of the DRAM market has been known for some time.

What is missing from the price action follows:

(a) Hynix must post a $250 million bond and a $300 million lien on real property by June 29.
(b) The European Union settlement goes into effect in approximately three weeks.
(c) The main portion of the anti-trust trial begins in September with additional anti-trust proceedings in July. At stake is more than $4 billion in damages that are to be trebled under the Cartwright Act. You do the math.
(d) The ITC trial gets underway in August if my memory serves me correctly.
(e) Rambus has the funding to not only manage the upcoming maturity of the existing convertible note, but will have sufficient cash to conclude any additional, desparate legal tactics.

I am not pleased by the dilution nor the timing of the issue, but I understand that this was the right security to issue if Rambus was going to raise capital.

Rambus at less than $15 doesn't make much sense to me.

carpe.diem
I am long Rambus.

Is Rambus the Next 27 Bagger?

Once the market begins to find out how pervasive the use of Rambus technology is and the size of the TAM, the share price will never again see the mid-$17s.

Rambus has continued to innovate throughout ten years of litigation so the long-term future should be bright.

This is the best researched, well written, current article on Rambus.

carpe diem

Rambus: The Next Big Litigation Play

HerrKevin,

Did you read the article? If Rambus technology "sucks", why have all of the memory manufacturer's "stolen" it and incorporated the technology into every generation of memory products produced over the past 10 years?

Rambus finally has a chance to get paid.

This is a very good synopsis of reams of information. NJ, thanks very much.

Disclosure: Long RMBS for 10 years

carpediem0496

The Tessera Gold Rush

As usual, Nuke has done a thorough analysis of the complexities of the legal landscape.

TSRA is well positioned to prosper in a difficult macro-economic environment. With significant cash reserves and no debt, TSRA can pursue payment for past infringement and new licensing agreements without being unduly pressured to settle on less than satisfactory economic terms.

QCOM has already said it will source from Amkor to ensure supply.

In addition, TSRA has other new technologies that will help drive growth. This does not appear to be a one trick pony.

Disclosure: long TSRA (and RMBS)
carpediem0496

Exclusive: Big Banks' Recent Profitability Due to AIG Scam?

There is always more to these situations than meets the eye. Given the lack of character of the participants, it is not hard to imagine that Paulson and Geithner have been less than honest with the taxpaying public.

The real problem at AIG-FP was the ability to write these "policies" without having to post collateral. A collateral requirement would have prevented this from ever happening. Instead, leverage was infinite. Now everyone gets to pay and the bailout is really for speculators, which could have been banks, hedge funds or other market participants. Add that to the outrage.

All Roads Lead to Rambus

The article highlights some key points.

While Rambus has been ripped of by the "corporate kleptomaniacs" and the closure of ten years of litigation should lead to billions of dollars in recoveries from what has been stolen, that is only part of the story.

Rambus has continued to innovate through all of this. XDR and MMI are examples of this.

Going forward, I expect Rambus to have a robust business as litigation concludes and as Rambus is recognized for its technological leadership. Rambus could easily have $1 billion plus in revenues in a very short time.

I am long Rambus.

Rambus Steams Ahead

Complex litigation can be difficult to follow and the vagaries of the court system add another element of risk.

Pruf does a good job of distilling the current situation into a concise, understandable article.

Only in America can the criminal conduct of the memory cartel be tolerated for so long. Judge Whyte is finally bringing the Hynix litigation to a close after 8 1/2 years. As Nuke John points out above, the Robinson ruling that initially appeared to favor Micron is looking tenuous at best.

Sunlight is shining on the collusion of the memory manufacturers that drove RDRAM from the marketplace in the anti-trust trial in Judge Kramer's court. Damages of $4 billion are subject to trebling under the Cartwright Act.

Rambus has not only defended itself through this coordinated, litigation to the death strategy pursued by the memory manufacturers, but has some how continued to innovate. XDR is another step forward for Rambus IP.

You may ask why is there so much litigation around Rambus? Simply put, the revolutionary memory technology found in Rambus IP was so superior that it has become unbiquitous. The list of infringing companies is very long. It is time for every company that infringes to settle and get back to the task of making great products.

2009: Rambus' Year to Shine

Blee,

I certainly recognize that there are two sides to every story. What I do not see in your comments are any facts that support your argument.

The ALJ for the FTC fully exonerated Rambus (and why the FTC attempted to over rule the ALJ remains unknown). The FTC has now lost despite great and wasteful expense of taxpayer resources.

A jury found for Rambus 37-0 in a patent infringement trail with Hynix. Rambus prevailed in all three phases. Hynix is facing the finalization of the judgment as I write and may have to post a bond as much as $500 million. Of course, all of the other memory manufacturers have infringed as well.

The AT trial that is beginning will expose how RDRAM was driven from the marketplace after collusion by the memory manufacturers who feared becoming fabs for Rambus and Intel. Already damning evidence is being made public in filed motions.

Rambus offered up its revolutionary technology for pennies relative to the benefits derived from its application - hardly a king's ransom.

I could go on. You can check out rambus.org if you are interested in doing due diligence. Primary documentation is posted there.

But it seems to me that you believe the benefits of Rambus IP should be distributed for your use for free (which is an unfortunate sign of our times - why work if someone else will carry the water for you).

Rambus IP is in PCs, TVs, cell phones, digital cameras and set top boxes among other things.

Rambus continues to innovate with XDR as an example.




On Mar 16 01:10 PM Blee wrote:

> I notice that everyone commenting so far seem to have Rambus stock,
> humm; isn't that interesting.
>
> No one involved in this mess is without sin, and Rambus set it's
> sights on big money a long time ago. Why would they destroy documents?
> Because it would hurt them, humm.
>
> Rambus sat on the committee to set standards for the industry and
> wow, they included their own patented device structure, imagine that.
>
>
> They remind me a little of Enron and their little debacle.. Rambus
> should certainly get something out of this mess, but; it could or
> maybe should be jail time or smaller patent fees.
>
> Ultimately it is us, the consumer who will pay for this mess.
>
> Blee

2009: Rambus' Year to Shine

Rambus is unique in two ways. It revolutionized memory technology and it pursued a genuine IP business model (no trolls here) that promised extraordinary returns on capital.

The problem was the memory manufacturers decided to steal the technology and pursue a litigate to the death strategy. The miscalculation was that Rambus would survive a ten year long assault. If ever there was a time to defend American IP, it is now.

It is difficult to follow a litigation story. It requires time and the vagaries of the judicial systems have been on full display with Rambus. For the most part, it has been a story of justice delayed is justice denied.

However, it seems as if the truth is finally unfolding. The article is a concise, accurate summary of the facts of the Rambus story.

I expect that Rambus shareholders will soon be rewarded. I hope so because I am long.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

There is plenty of blame for both management and the UAW. Both have made decisions that cumulatively crippled Detroit.

The UAW has garnered outsized cash and benefit compensation for its members. UAW leadership also refused to see that productivity and quality are the keys to maintaining that lifestyle. (Insert all of the bad things about unions here.) By failing to police itself, the UAW has failed its members.

Management's list of failures is equally impressive. Let's begin with the post-war era. Deming, the guru of quality and statistical process control, was dismissed when he brought the ideas of continuous improvement, metrics and inventory control to Detroit. The Big Three were selling everything they could make because WWII was over, consumer demand was pent up and the productive capacity of the rest of the world was destroyed by the war.

Deming went to Japan. Ultimately, the Japanese learned to build the highest quality cars for the money in the world. Detroit went on to "sell" cars and the Japanese and Germans "built" cars.

Now, the Big Three produce inferior products that many people do not want to buy. Current and legacy labor costs prohibit competitive pricing given the feature and quality deficiencies of the products.

It's a big, giant mess.

The government will probably cave in because it is afraid of what the impact will be on the Pension Benefit Guaranty Corporation.

The bottom line is that a bailout now will only postpone the inevitable and increase the cost of failure in the future, which will happen because roots causes will not be addressed by a bailout.

Let the Big Three fail. Management and labor will be restrucured along with the companies. The companies will emerge smaller with different cost structures and with some good fortune develop better products. It may be the only way to save Detroit in the long run.

Why should the taxpayers pick up the tab for negligence on both the part of management and labor?

The Long, Steep Road Ahead - to Capitalism

To My Friends at Ockham Research from a Kindred Spirit,

Your words are very true, but lost in the noise and economic illiteracy of the day. All you have to do is sample the likes of bosun.j.

Nevertheless, it is worth making the case for freer markets, especially if one has compassion for the poor.

Can you imagine what school competition could do for inner city children?

Let's not give up on free markets. The alternative is yoke of servitude at the hands of government.

The Deflation Debate: Why This Time Is Different

He may be right for the wrong reasons. The massive explosion of money created by the Fed will likely stop a deflationary spiral in the long-term.

Inflation subsides in any recession and the question here is how long and deep will this recession be.

China does have about 300 million people with discretionary income. Granted it is a fraction of the total population of 1.1 billion people, but it is still a large number. Everyone should hope they keep spending.

What he does point out is that the US Government is pursuing the economic policies of a banana republic. We have just witnessed the discipline of the market when too much debt relative to income/cash flow occurs.

Ultimately, the hazards of excessive government spending, inflationary monetary policy and the trade deficit will be harshly judged by the global market place. (We will see if the new Obama adminsitration is as naive as I think when it comes to even larger government programs and larger deficits.)

The rally in the dollar is temporary and the trend of US dollar weakness will resume as the current crisis fades. The US Government is debasing the dollar by defict spending to support current consumption (and a new government healthcare program will just compound this massive problem). A huge percentage of the $3.1 TRILLION federal budget is consumption spending.

The only way for the US to recover is to stop asking the government to do everything and insist that government spending (both real and as a percentage of GDP).

The US used to be the world's largest creditor nation. All of that has changed beginning with Johnson's Great Society spending. All that has done is transfer more power and influence to the federal government and it has done nary a thing for the poor it was supposed to help.

Even an economy with an inefficient, corrupt central government like China's can prosper as a creditor nation.

Out of the Election and into the Frying Pan

I have a libertarian philosophy in the spirit of Jefferson and Hamilton. Change would mean refocusing on the Constitution and Bill of Rights, focusing on personal freedom and personal responsibiltity, and focusing on reducing the size of government as a percent of GDP by eliminating useless programs, wasteful spending and all kinds of transfer payments.

Individualism, economic freedom and entrepreneurship made America great. Big government, entitlement and the general ignorance of American history and constitutional government have made America soft.

As people begin to focus on Obama from a policy perspective, which by the way should have been done during the primaries and Presidential campaign, there will likely be many questions - in part because Obama was so vague and often offered conflicting statements. The only point of consistency was his plan to raise taxes and his view that government should be at the center of all things economic.

If he has his way, I expect the Mr. Market to catch a considerable cold.

I do not see Obama as thoughtful at all. I see him as ideological with very liberal tax and spend agenda. For example, he wants to raise taxes on capital because of his arbitrary sense of fairness even though he acknowledged that the empirical evidence did not support his view.

Let's hope he has no honeymoon given that he has had a free pass in the press for the last two years. Just maybe then, Obama will not wreck what is left of the economy.

Let's hope he is pragmatic. I am not holding my breath.

The Shallowest Generation

The financial house of cards began with FDR and his set of social programs, including Social Security. (SS is a Ponzi scheme and anyone in the private sector that tried it gets put in jail.) Johnson had is great society. The boomers that came of age in the 1960s are the generation of peace, love and free sex - luxury given to them by the self-sacrifice of the greatest generation.

Mr. Quinn is correct that we are up to our eyeballs in do-do. We can debate about the reasons why. Then he turns to Obama as an example of leadership? I'm sorry, but that is moronic.

Obama, who will likely be the next President, is at best an unknown quantity. His solution is to expand government with an additional $1 trillion in new programs. Tell me how this is good for America and how the progressive agenda will lead to the pursuit of life, liberty and happiness?

All Obama will do is finish the bankrupting of America. (BTW, I am no fan of McCain.) Obama is about creating dependency on government so that he and the progressives/liberals can entrench temselves in power. Why is that so hard to see?

Maybe I will discuss my ideas on how to deal with the current mess at another time. Mr. Quinn completely lost me when he held up Obama as some kind of virtuous leader. God help us all if he wins and has a bulletproof Democratic Congress.

Final Presidential Debate: The Wurzelbacher Falls

Obama is a socialist. Period. The government with its taxing and spending/redistributio... power is at the center of everything he believes.

He will destroy what is left of America after this financial crisis - which at its root was caused by government interference in free markets via the Community Reinvestment Act and the GSEs.

The majority of people do not know they are on the road to serfdom with Obama.

McCain is highly flawed as well and lacks a certain amount of coherency in his policies.

There was no real discussion of policy in terms of why Obama's socialism will actually work when the world is littered with failed socialistic experiments. Neither was there discussion of why McCain's policies would lead to a quicker recovery.

Almost 100% of the many people I talk to know that the federal government has a $3 TRILLION plus budget. There is too much government spending as it is. Any government that is big enough to give everything to everyone is big enough to take it all away.

Once the fear subsides, I wonder how many people who vote for Obama will regret it.