Rambus Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of memory technologist Rambus (Nasdaq: RMBS  ) jumped 11.6% in early trading today on massive trading volume.

So what: The company just signed a patent license with leading memory chip builder Elpida, resulting in higher revenue guidance and a $150 million payout over the next five years. Elpida's long-standing licensing agreement with Rambus expired in 2008, causing severe tire damage to Rambus' revenues, but now the twain are back together again.

Now what: You don't want to snub Rambus on patent licenses for too long, lest the company goes legal on you. Last week, Rambus filed patent infringement suits against a cadre of supposed infringers including Broadcom (Nasdaq: BRCM  ) and NVIDIA (Nasdaq: NVDA  ) , seeking damages for using the company's technologies without a proper license. It's not a pleasant way to do business, but you gotta do what you gotta do when the purported patent-tramplers freely admit that they won't sign deals without a lawsuit in hand.

Interested in more info on Rambus? Add it to your watchlist.

Fool contributor Anders Bylund doesn't hold a position in any of the companies discussed here. NVIDIA is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

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