This is the first in what will be a weekly series of financial news and how public relations and crisis play a role in stock prices. Special thanks to Yahoo! Finance for the financial data.
The Wall Street Journal, Washington Post and other news sources are reporting a major legal setback for chipmaker Rambus. Rambus, primarily known for its catastrophic loss in the RD vs DDR ram wars, has been accused of monopolistic practices by the FTC. Shares of its stock are currently down over 20 percent.
It has been a long, bumpy road the Rambus, whose potentially technologically superior ram products failed, not because of product design, but because of marketing and a failure to “work well with others.” In an older article, PC World Magazine explained that Rambus was requiring manufacturers to pay expensive licensing fees to use its products. According to Tom Mainelli, Rambus is also no stranger to legal battles:
RDRAM is also plagued by its creator’s tarnished public image. Rambus has
infuriated much of the memory industry by filing lawsuits claiming ownership of basic patents to SDRAM. Rambus recently lost
its first case, which was against Infineon Technologies
Also in the Wall Street Journal Online Adobe Systems shares are up following the company meeting quarterly expectations. Also, game maker Electronic Arts is surprisingly up despite a growing loss. Surging videogame sales seem to be carrying them for now.
Trouble for internet telephone provider, Vonage, continues. Their stock is currently trading at lower than half its initial public offering price.
Finally, troubles continue for Kodak. MSNBC recently reported that the veteran camera maker is selling its entire camera manufacturing line to Flextronics Ltd. It has been reported today that Kodak’s revenues dropped 8.8 percent last quarter. Kodak’s public relations efforts have responded strongly to the news of the outsourcing, saying that this “move will bring greater flexibility and cost efficiency while ensuring Kodak’s world-class quality and product leadership in the digital camera marketplace” in a press release yesterday.
Flextronics’ stock has responded in kind with a boost today.