Rambus share price goes ape banana-ballistic

Updated OK, so Intel will put quarter of a billion greenbacks into Infineon when it floats away from parent Siemens in mid-March. Then something happens in the depths of Wall Street, and Rambus shares, already artificially inflated because of the myth that Intel's Willamette processor will only work with Rambus RIMMs, flies sky high from $137 to $178. That was yesterday's close. The price has already soared to over $200 at the time of this update, so maybe it will go to $250 tomorrow. This particular share price is like a white-knuckle ride, and we can only think that some sort of collective madness has descended on Wall Street and punters for the price to fly so high. What are we missing here? Intel said at its Developer Forum last week that it is continuing to back Rambus, despite being forced to climb down because of a) lack of RIMMs, b) non-working motherboards and c) because the PC vendors didn't want to be bumped into using it, and preferred SDRAM. Further, even Itanium, Intel's flagship 64-bit processor, will use synchronous memory. Then again, Foster, the server/workstation version of Willamette, will use supposedly inferior double data rate (DDR) memory rather than Rambus... If the share price gets much higher, one share might just cover one 128MB RIMM... Just a few weeks back, at the Platform 2000 conference in San Jose, a couple of analysts said that Rambus memory was unlikely to make a big splash in the PC market, and Intel itself revised downwards its estimates of RIMM market share. The phenomenal rise in shares in Rambus since IDF is probably due to people "shorting stock". There is an explanation of this practice here at the Motley Fool. And that was definitely happening in the Intel press office at IDF last week. As we reported last week, we were sitting near to a New York financial analyst when Albert Yu was demoing the Willamette processor and heard her get on the blower straight away saying: "cover me"... ® See also Intel to plunge $250 million into Infineon Intel Developer Forum Q1 2000