Rambus Rises on Rumor
Rambus (RMBS) shares jumped almost 20% Thursday as an acquisition rumor sprouted around the company and its beaten-down stock.
"My independent research has been unable to verify any substance to such an event," says analyst Mike Cohen, who is director of research at Pacific American Securities and who owns the stock.
Rambus shares rose 18% to $12.16 Thursday on heavy volume of almost 10 million shares.
Shares have been on a downward trajectory since early June when they traded around $16. The decline began when Rambus launched a patent-infringement suit against Samsung Electronics, the world's largest memory-chip maker and previously a significant Rambus customer.The oft-litigious Rambus is a designer of semiconductor memory and interconnect technologies that it licenses to chip companies. The company is involved in several legal battles with large memory manufacturers, including Micron Technology (MU) and Hynix Semiconductor. Rambus, which settled a case earlier this year with Infineon Technologies (IFX), is also in the midst of a suit with the Federal Trade Commission, and it has launched its own antitrust suit against memory-chip makers. The accelerated drop in Rambus' stock during the past two months was spurred, according to Cohen, by investor fears regarding upcoming court hearings in San Jose District Court pertaining to its case with Hynix. Those hearings are slated to begin Oct. 17. Also, a ruling is expected shortly out of a Virginia court regarding Samsung's case against Rambus involving a requested change of venue. Cohen says the latest swing in the stock is just another indication of the volatility associated with Rambus, which has been wrapped up in legal battles for years with potentially billions of dollars at stake. "It's worth either $5 or $90," he says, adding that the varied valuations are based on whether or not someone expects Rambus to ultimately win its legal cases.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV