UPDATE 2-Rambus shares fall on possible trial delay

Wed Jan 13, 2010 5:21pm EST

Related Topics

* Defendants request 2-month delay -source

* Rambus down 8.1 pct, Micron up 2 pct

* Rambus option volume jumps to four times norm (Adds analyst comments, options; updates shares)

By Ian Sherr

SAN FRANCISCO, Jan 13 (Reuters) - Shares of memory chip designer Rambus Inc (RMBS.O) fell 8.1 percent on Wednesday on fears the company's antitrust trial might be delayed for two months.

The trial, due to start in January, is pivotal for Rambus, and could involve up to $12.9 billion in damages. The Los Altos-based chip designer has accused Samsung Electronics Co Ltd (005930.KS), Micron Technology Inc (MU.O) and Hynix Semiconductor Inc (000660.KS) of colluding to fix prices, hurting sales of Rambus' RDRAM memory chips for computers. [ID:nN04175802]

It was not immediately clear which of the defendants requested the delay, nor why, but a source familiar with the matter told Reuters that a pretrial motion by Micron Technologies had asked to delay the trial for two months.

The motion will be considered at a Jan. 21 hearing in San Francisco, the source added.

"The potential delay in the trial has the stock under pressure," said chief investment strategist Jud Pyle at the Options News Network www.ONN.tv.

Court documents, partly redacted, showed that Micron Technologies sought a continuance, or delay, of the trial for an unspecified amount of time.

Rambus options volume was four times greater than its average daily turnover, with about 77,000 calls and 51,000 puts traded, according to option analytics firm Trade Alert.

The January puts and calls with strike prices ranging from $21 to $24 attracted brisk activity as some investors reacted to the stock's volatility and others were likely closing out positions ahead of this week's January expiration, said WhatsTrading.com option strategist Frederic Ruffy.

January options go off the board on Friday after the close. The stock's option implied volatility, a key driver of an options price, fell 9 percent to 88 percent, Ruffy said.

Rambus stock often swings on legal news. Most notably, shares jumped 9 percent when a blog post that claimed to be from Rambus' former general counsel, John Danforth, speculated that Micron might settle the case.[ID:nN09275922] Then the stock shot up again when Rambus published a statement that it saw the trial on track. [ID:nN23271548]

Shares of the Los Altos-based company fell $1.89, or 8.12 percent, to close at $21.40 while shares of Micron rose 20 cents, or 1.95 percent, to $10.46 on the Nasdaq. (Reporting by Ian Sherr, Gina Keating and Doris Frankel; Editing by Phil Berlowitz, Gary Hill)

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