Rambus stock tumbles on Tom's Hardware report

The message begins to sink in

By Drew Cullen, 20th March 2000

Steps to Take Before Choosing a Business Continuity Partner

We can only imagine the flames from burnt day traders scorching Tom's Hardware's way following the site's recent blockbuster article and killer test on Rambus, the go-faster for big, big bucks memory technology. This is to blame for a 20 per cent fall in Rambus share price, an analyst claims.

"The stock is getting killed because of the report," Drew Peck, an analyst at SG Cohen Securities, told Bloomberg. He rates Rambus stock 'neutral. "In this environment, it doesn't take much to tip it over. It's more or less and 'shoot first and ask questions later'." Rambus shares fell 76 1/2 to 317 1/8 in "late trading of 3.5 million after touching 316", Bloomberg reports.

Last week Tom's Hardware columnist Van Smith noted vendor "misinformation" concerning Rambus performance. "It seems to be common practice at Intel and Rambus to unload everything they can find to handicap SDRAM when comparing it with RDRAM," he wrote.

"Given Thomas Pabst's latest tests showing that RDRAM actually degrades system performance while doubling the system price, from our vantage point Rambus does not have much to recommend it." Astonishing, isn't it - that it took Tom's Hardware to prick the trading bubble enveloping Rambus? The facts surrounding Rambus - yield problems, expense, performance issues, OEM unpopularity - have all been in the public domain for months. But still, they traded.

Occasionally, a vociferous Rambus-trading claque would pause for breath from chasing the stock skyward, to send abusive emails to The Register accusing us of being anti-Rambus. We're not. Rambus remains a high-risk, high-reward play. But at current market cap - and that's post the Tom's Hardware piece - the risks look understated and the rewards exaggerated. ®