Paging Midas, I mean Azurik
Midas here
Nice follow-up day on RMBS, with good volume. Technically, it has clearly broken out of its major resistance. $26 would be the next hurdle, then no major resistance until $41+.
Fundamentally, if Samsung settles (lets stick with the conservative amount that a lot of analysts are running around the rumor mill - $1.3 billion in damages plus average ongoing royalties of 2% to account both for DRAM and DRAM controllers). Samsung owns 35% of the overall $25 billion DRAM market, and an unknown percentage of the controller market. Plug in a P/E of 25-30 and arguments can be made that the stock should be worth $60 - $100 on Samsung alone. On the flip side, the markets crash and no one settles before the trial, then we need to see the trial through its course - RMBS will probably have a run-up to the January trial, but will be much more affected by the general stock market's course. Keep in mind we have the ITC decision in late January.
It will be a wild ride, lets hope it's on the up side. It would really make a nice birthday present (my birthday is Dec 8) if settlements were signed this weekend and announced Monday, but that's a big stretch. Hey, what can I say, I have big dreams!
There's my Friday quick notes. Stay tuned