You remember QCOM? It had a monster (nearly 30-bagger) run in 1999 and created many millionaires. QCOM was involved with several lawsuits related to their CDMA technology, currently used in many cellphones. They won several landmark cases and the rest is history. Now QCOM is a huge cash cow that gets royalty via CDMA licenses.
Now we have a similar situation relating to memory chips. Rambus (symbol: RMBS) had found a way to solve the memory bottleneck problems facing computers years ago but they weren't paid royalties for it. In essence, their intellectual property was abused by several unscrupulous chip firms (namely Infineon, Micron, Hynix and Samsung) who conspired to force Rambus into insolvency by litigation, price-fixing and other means. This story spanned across nearly a decade, with Rambus in constant litigation against the conspirators and the FTC. Ultimately, Rambus came out victorious. Now, Rambus, having won some landmark battles, is going on the offensive and suing theses companies for Anti-Trust practices. The court date is scheduled for September of this year, and many believe that Rambus will easily win because of the precedent set by previous cases.
Rambus' intellectual property is used in virtually all electronic products, ranging from computers, HDTVs, servers, printers, digital cameras, camcorders to cellphones. Estimated sales of these products are in the hundreds of billions of dollars. A 2-4% cut for Rambus could mean at least $5 billion dollars a year.
I don't know if Rambus is really going to be the next Qualcomm but they both are in the intellectual property business. I think winning the coming lawsuit in September should open the floodgates for huge price appreciation. This assumes no more surprise in delays. Nearly a decade in litigation already for Rambus. Let's hope all this will be behind them soon, and they get to reap the huge rewards.
Several good articles have been written about the story of Rambus that are worth reading:
- 2009: Rambus' Year to Shine
- Is Rambus the next 27-bagger?
- Rambus - the next big ligitation play
- All roads lead to Rambus
- Rambus will outlive FUD
- Rambus and a Price-Fixing Tale
*Trend analyze RMBS (or any other stocks) here for free
**Get the most important book you will ever read about the stock market.
Now we have a similar situation relating to memory chips. Rambus (symbol: RMBS) had found a way to solve the memory bottleneck problems facing computers years ago but they weren't paid royalties for it. In essence, their intellectual property was abused by several unscrupulous chip firms (namely Infineon, Micron, Hynix and Samsung) who conspired to force Rambus into insolvency by litigation, price-fixing and other means. This story spanned across nearly a decade, with Rambus in constant litigation against the conspirators and the FTC. Ultimately, Rambus came out victorious. Now, Rambus, having won some landmark battles, is going on the offensive and suing theses companies for Anti-Trust practices. The court date is scheduled for September of this year, and many believe that Rambus will easily win because of the precedent set by previous cases.
Rambus' intellectual property is used in virtually all electronic products, ranging from computers, HDTVs, servers, printers, digital cameras, camcorders to cellphones. Estimated sales of these products are in the hundreds of billions of dollars. A 2-4% cut for Rambus could mean at least $5 billion dollars a year.
I don't know if Rambus is really going to be the next Qualcomm but they both are in the intellectual property business. I think winning the coming lawsuit in September should open the floodgates for huge price appreciation. This assumes no more surprise in delays. Nearly a decade in litigation already for Rambus. Let's hope all this will be behind them soon, and they get to reap the huge rewards.
Several good articles have been written about the story of Rambus that are worth reading:
- 2009: Rambus' Year to Shine
- Is Rambus the next 27-bagger?
- Rambus - the next big ligitation play
- All roads lead to Rambus
- Rambus will outlive FUD
- Rambus and a Price-Fixing Tale
*Trend analyze RMBS (or any other stocks) here for free
**Get the most important book you will ever read about the stock market.