LOS ANGELES (AP) -- Shares of chipmaker Rambus Inc. rose Tuesday after an analyst said that shares have fallen so far this year that they are not likely to fall much further, even if Rambus fails to renew existing contracts with customers.
THE SPARK: JPMorgan analyst Paul Coster upgraded his rating on Rambus to "Overweight" from "Neutral," saying that the company is worth $4.25 to $4.50 per share based on the value of its existing contracts, as well as cash on hand.
THE BIG PICTURE: Rambus is a technology licensing company that is involved in patenting chip designs. It makes most of its money by licensing its technologies to other companies for use in their products.
Part of the reason shares have fallen nearly 40 percent this year is because of an antitrust trial loss in November and the invalidation of a patent.
THE ANALYSIS: Coster said that patent rulings, finding a new, permanent CEO and a seasonal pickup could lift the stock.
SHARE ACTION: Shares of Sunnyvale, Calif.-based Rambus rose 44 cents, or 9.7 percent, to $4.91 in afternoon trading Tuesday. Shares lost more than half their value in one day— plunging from $18.04 to $7.11 — after a jury decided in November that chipmakers Micron Technology Inc. and Hynix Semiconductor Inc. didn't conspire to fix prices of memory chips, denying Rambus billions of dollars in damages.