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Rambus could use 4:1 split to fuel acquisitions

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A Securities and Exchange Commission (SEC) filing made by semiconductor technology firm Rambus last week, has revealed the board of directors' thinking about splitting its shares 4:1 in May. The SEC form 14A, was filed by the corporation early last week, and shows that the split, which was decided upon when the share price hovered close to $500, would broaden its stockholder profile and give it extra monies for potential acquisitions. The board, says the filing: "Believes that the proposed Stock Split will result in a market price that should be more attractive to a broader spectrum of investors." That statement suggests some concern at Rambus about the erratic way the share price has ducked and dived over the last nine months or so. However, the statement continues: "The Board of Directors also believes that it is in the Company's best interests to increase the number of authorized but unissued shares of Common Stock in order to have additional shares available to meet the Company's future business needs as they arise. Among other things, the increase will provide shares to finance acquisitions of other businesses consistent with the Company's growth strategy." Meanwhile, in the last few days, Rambus has re-vamped its Web site and included a section which attempts to deal with some of the issues for which it has received criticism. Over at Industry Talk, there are links to different online sites, including Anandtech and Sharky Extreme, and explanations about pricing and availability presumably intended to re-assure customers and investors. Rambus claims, for example, that "Rambus-based systems are priced within $200 of comparably equipped SDRAM-based systems. For example, the quotes from Dell's web site on March 22, 2000, showed a Dell Dimension XPS B733r Series system using Rambus memory priced $161 higher than a comparably equipped Dell Dimension XPS T700r Series system using SDRAM. " It also claims that list prices for RIMM modules "on various web sites" can be misleading. It continues: "Each RIMM module sold as an "upgrade" module potentially prevents a PC system shipment while demand exceeds supply. Therefore, upgrade RIMM module prices listed on various web sites are often set high to discourage upgrade module sales." However, a swift look at SMC Direct, which does not sell PC systems but only components, reveals there is still a considerable price delta between 128Mb RIMMs and 128Mb SDRAM DIMMs. That site shows the Rambus solution costing £587.50 including VAT, while an SDRAM DIMM costs £126.90 including VAT, nearly 4.7 times more expensive. Rambus also claims that the demand/supply problem it is facing will be overcome, and quotes Dataquest and In-Stat market share figures to back up its claims. ®

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