Saturday, April 24, 2010

Snippets from Barrons article on RMBS

Thanks to InvestorVillage posters, here are some snippets from today's article in Barrons on RMBS:

"So far, results have been mixed, even when Rambus (ticker: RMBS) ostensibly wins. A major settlement with Samsung Electronics (SSNGY) came in far below expectations. Yet Rambus boasts a $2.9 billion stock-market value, based largely on bulls' bet that its $12 billion lawsuit against Micron Technology (MU) and Hynix Semiconductor will succeed, producing a rich reward." (snip)
"Optimistic analysts say a victory could help propel the stock, recently around 25, up to 50." (snip)
(Reflecting the Micron/Hynix case) "If the court finds in its favor, the damages would be tripled to roughly $13 billion. Bulls deduct taxes from that result, divide it by Rambus' 117.5 million shares outstanding to determine that the company will enjoy a $66-per-share windfall." (snip)
(Reflecting on Samsung's settlement for $900 million), "If Hynix, based in Korea, and Micron, based in Boise, Idaho, settle for $900 million each, that would lead to a total of $1.8 billion, which after taxes shrinks to $1.1 billion, or $9 a share."

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