Rambus a Steal Under $25

I bought a pretty significant position in Rambus (RMBS) at the end of the day today. It is a special situation trade that I think may be pretty huge. The company is FINALLY getting results out of a decade long court case against a cartel of DRAM makers that have infringed on Rambus' patents. Today, the news came out early of Samsung's settlement and I didn't really have time to digest it until later in the day which kind of sucked because had I realized the gravity of the situation, I would've bought immediately. The Samsung deal basically doubles RMBS trailing twelve months of revenue by contributing $25 million PER QUARTER for the next 5 years! ON TOP OF THIS, Rambus gets another $200 million in cash plus Samsung invests ANOTHER $200 million by buying stock at $20.88 per share (which is a damn good price for Samsung) and it definitely puts a floor under the stock. I was shocked to get the stock under $25 at the end of the day. With the Samsung settlement alone, RMBS is probably a $30 to $35 stock.

However, I couldn't help thinking that this settlement now opens up a wellspring of settlement opportunities for RMBS. The other two companies involved in patent infringement are Hynix (a South Korean Company) and Micron. Tonight, I was doing some more research when this link came across the wires. Hynix is saying that they are now "open to settlement" outside of court. Wow! So now, the question is when will Micron fall?? Will there be other settlements? If you want to read more about a gabillion other companies that are probably also infringing on RMBS patents, there are some good posts over on the RMBS board on the InvestorVillage.com web site.