Rambus benefits from rival's woes
Published: 02 Jan 2004 08:35 GMT
Shares of memory maker Rambus continued to rise on Wednesday as investors reacted to reports of a possible plea deal between rival Micron Technology and federal investigators.
Rambus shares rose $3.27 (£1.93), or more than 12 percent, to close at $29.77 on Tuesday, following a Monday story by Bloomberg reporting that Micron might admit to price-fixing amid a broader grand jury probe. Shares were up another 3.6 percent, or $1.08, to $30.85 in midday trading on Wednesday.
Micron has enjoyed surprisingly good financial health recently, even as the price-fixing inquiry threatens to embroil the company. This month the posted first-quarter net income of $1m on sales of $1.1bn. That compares with a $316m net loss on sales of $685m in the same period a year earlier.
But the probe, launched in July 2002 to investigate an unusual, late-2001 spike in memory prices, is forming clouds on Micron's horizon.
Earlier this month, a former regional sales manager agreed to plead guilty to obstruction of justice in the investigation. The manager was charged with altering his handwritten notes relating to telephone conversations among Micron sales managers discussing memory price recommendations. The manager has since resigned.
Micron representative David Parker said Wednesday that the company wouldn't comment on the ongoing federal investigation, but he said it had cooperated with the government since the beginning of the probe and would continue to do so "as appropriate."
CNET News.com's Michael Kanellos contributed to this report.
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