Rambus rises on Intel investment

Shares up 16.5% yesterday, 7% Tuesday

By Tony Smith, 19th September 2001

Magic Quadrant for Enterprise Backup/Recovery

Rambus' shares rose rather better than they had the previous day, the effect of a second day of investor confidence in the company after it announced it would be making $200 million over the next five years out of a licensing deal with Intel.

In the immediate aftermath of Monday's annoucement, RMBS shares closed on Tuesday up seven per cent. Yesterday, however, the stock rose 24.6 per cent to $8.30 before closing at $7.76, an increase of 16.5 per cent.

That's good for longer-term investors hoping to see their shares once more command upwards of $116.

Intel's quarterly payments of $10 million will keep Rambus going over the next five years, and that's clearly what has pleased investors. However, with the outcome of the company's appeal against the verdicts that went against it during its legal battle with Infineon, and its upcoming fight with Micron, the prospect that the company's stock will fall - just as it did when the Infineon verdict was announced - is a strong one.

And whatever the technical merits of Rambus' flagship RDRAM product, the PC industry is falling in line behind DDR as the next mainstream memory standard, Intel's continued support for the Rambus technology notwithstanding. Not that Rambus is wholly dependent on that market, of course, as plenty of other products, such as Sony's PlayStation 2, use RDRAM. ®