Feeds

Morgan Stanley's vote for a $500 Rambus

Go, RMBS, go! Break that speed of sound

  • alert
  • submit to reddit

Top 10 endpoint backup mistakes

Staff at The Register have now had a chance to view a Morgan Stanley Dean Witter report on Rambus which it issued on the 23rd of March last and which caused shares in the memtech company to rocket on Wall Street. The report is interesting in many ways, not least because it says that its target share price for Rambus is $500 with a market capitalisation of $8.5 billion. It also appears to think that the i820 chipset, despite the trouble the whole industry has seen with it, is a solid and sound platform for Rambus' future. Taiwanese manufacturers, as we have reported previously, are not of this view. The report says: "We rate RMBS Outperform. We believe that Rambus has one of the most attractive intellectual-property (IP) franchises in the semiconductor industry and that it will become the de facto standard for PC main memory during the next three to five years." The pre-split target of $500 (RMBS splits its shares 4:1 in May/June), is based on what Morgan Stanley describes as "the average IP company" with 2.5 times growth on C2001 earnings. Further, the investment broker believes investors who can tolerate price volatility should buy into it. Why? The report says that Rambus is similar to a software company, earning high gross margins because it just licenses its technology to semi firms, but it has the benefit of extremely low sales and marketing costs. It cites the Intel Developer Forum as showing that Chipzilla (our word) delivered straightforward support for Rambus. Of course, this does not take into account the highly ambiguous statements Intel also made about Willamette's big server brother Foster at IDF. Morgan Stanley thinks Rambus RIMMs will represent 50 per cent of the memory market in 2003. And the i820 debacle, or Caminogate as we describe it? The firm believes that the i820 chipset will bring "other bandwidth enhancing technologies to the PC platform". Rambus, as we reported from IDF, and since, is cutting costs and tweaking the platform to deliver volume production, says MS. Morgan Stanley admits it's biased. The small print on the analysis is interesting, because as a matter of course Morgan Stanley & Co, Dean Witter Reynolds and/or affiliates have managed or co-managed a public offering of Rambus stocks. And, more small print adds, such firms and their employees have or could have long or short positions on these stocks. Plus, the same outfit, in the words of the report: "make a market in the securities of Rambus and Intel". One independent analyst commenting on the report, says that the rationale for the $500 forecast is likely to deliver a target price of $422, based on 2.5 times growth being equivalent to the target pe. Three year growth amounts to 130 per cent, and 2001 earnings, which should be used as the $500 is a 12 to 18 month target, gives 2.5 x 130 x $1.30, which equals $422. Rambus (ticker RMBS) closed at $332.3125 at close of trading last Friday evening. ®

A new approach to endpoint data protection

More from The Register

next story
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

7 Elements of Radically Simple OS Migration
Avoid the typical headaches of OS migration during your next project by learning about 7 elements of radically simple OS migration.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?