Nvidia falls on margin, competition worries

Nvidia falls on margin, competition worries

Stock Market Predictions

(Global Markets) - Shares of Nvidia Corp (NVDA.O) fell 6 percent in pre-market trade, despite the chipmaker's strong second-quarter forecast, as investors feared rivals Advanced Micro Devices (AMD.N) and Intel (INTC.O) were stepping up competition.

Several brokerages including Citigroup and Bank of America Merrill Lynch cut their price targets on Nvidia stock, and Needham cut its rating to "hold" from "buy."

Needham said the growth rate at Nvidia's core business -- making graphics chips for PCs -- is slowing and gross margins are declining due to pricing pressure.

The bigger rivals have both launched central processors with integrated graphics, which might erode demand for Nvidia's low-end chips, and tablets are affecting demand for PCs.

Shares of the Santa Clara, California-based Nvidia were down at $19.22 in trading before the bell. They closed at $20.50 on Thursday on Nasdaq.

(Reporting by Sayantani Ghosh in Bangalore; Editing by Don Sebastian)

Schwab had net outflow in April

Schwab had net outflow in April

Stock Market Predictions

NEW YORK/SAN FRANCISCO (Global Markets) - Charles Schwab Corp (SCHW.N), the biggest U.S. online brokerage, said on Friday that clients withdrew a net $500 million in April, the first down month since last June, and its stock fell nearly 2 percent on fears the company would not meet its asset-growth goals.

Schwab said customers withdrew the money to pay taxes, and that customer trading activity slowed from a year earlier. A spokesman said April is typically the slowest month for inflows because of tax payments, but the company said the net outflow was its first for the month since 2001.

This April may have been worse than others because taxes were due later in the month, on the 18th -- not the customary April 15 cutoff, spokesman Greg Gable said. Tax payments "had a more dominant effect," he said.

Inflows have returned to "seasonal norms" in May, Gable said, and April's trading activity was little changed from March after several months of rising activity.

Trading activity at Schwab and other online brokers is watched closely since it helps measure the confidence that individual investors have in the stock market. Customer trading had been on the rebound over the past several months.

"Retail customers appear to remain engaged and net new brokerage accounts were the second highest in the past 12 months," analyst Matt Fischer at CLSA Credit Agricole Securities wrote in a note to clients.

Rising markets helped generate $35 billion in market gains for Schwab customers in April. That helped push client assets at the firm up to $1.68 trillion as of April 30, an 11 percent increase from the prior year.

But the outflows brought to $73.8 billion the total net inflows for the first four months of 2011, equal to annualized growth of 4.7 percent -- below the company's 2011 target of 8 to 10 percent growth, Sandler O'Neill analyst Richard Repetto wrote in a note to clients.

"The results were mixed, with negative core net new assets but better-than-expected client trading activity," Fischer, of CLSA Credit Agricole Securities, wrote.

Schwab's daily average client trades for the month fell by 1 percent from a year ago to 435,000. March volumes, by comparison, had jumped 16 percent from the previous year.

The San Francisco company also opened 83,000 new accounts in April, down 7 percent from a year earlier but a 1 percent increase from March.

Schwab said the asset outflow reflected cash payments for U.S. income taxes. "Tax season took a bite out of flows, turning negative for the first time in a decade, though management noted that things likely returned to normal in May," Fischer said.

Schwab, one of the largest sellers of mutual funds, also noted investors yanked a net $3.3 billion from money market funds, while pouring money into taxable bond and "hybrid" stock and bond funds.

Investors last month also pulled $521 million from large company stock funds and $195 million from municipal and other tax-free bond funds.

Schwab's stock fell 32 cents, or 1.8 percent, to $17.66 on the New York Stock Exchange, the second-worst performer on the 11-member NYSE Arca Securities Broker/Dealer Index. Shares of Schwab had risen 5.1 percent this year before Friday's client activity report.

(This story was corrected to show net outflow of $500 million in first sentence)

(Reporting by Joseph A. Giannone and Philipp Gollner; Editing by Matthew Lewis, Gunna Dickson, Gary Hill)

CA slides as gloomy outlook, competition worries weigh

CA slides as gloomy outlook, competition worries weigh

Stock Market Predictions

(Global Markets) - Shares of CA Inc (CA.O) plunged 11 percent on Friday, a day after the business software maker forecast a slow 2012, raising concerns that rising competition in its key mainframe business may hurt growth.

CA, which makes software to power large computers, posted a fourth-quarter profit and revenue missed Wall Street estimates, hurt by a 9 percent dip in international bookings.

CA's rival BMC Software Inc (BMC.O) forecast a strong fiscal 2012 earlier this month, boosted by solid bookings.

Brokerage Raymond James, which downgraded its rating on CA's stock to market perform, said a disappointing fiscal 2011 made it unlikely that 2012 would be a turnaround year.

"The hoped-for acceleration (is) not in sight," it said in a research note to clients.

"FY12 guidance signaled no meaningful top-line acceleration, declining margins, and tepid cash flow gains."

Weakness at its Europe, Middle East and Africa markets continued to hurt renewal of contracts and the company expects the softness to continue into fiscal 2012.

The company, which competes with Symantec (SYMC.O) and Intel-owned (INTC.O) McAfee in Web security, will sell the unit to venture capital firm Updata Partners of Edison.

Analysts viewed this as a positive that will help the company focus on its core business.

Brokerage RBC Capital Markets expects more M&A activity and said CA may hive off some businesses or buy some new technologies.

CA has a kitty of $300-$500 million earmarked for acquisitions in fiscal 2012.

RBC cut its price target on CA's stock to $28 from $30, but maintained its outperform rating.

Shares of the Islandia, New York-based company were down 10 percent at $22.55 in midday trade on Nasdaq. More than 8 million shares had traded hands by 1 p.m. ET -- two times normal volumes.

(Reporting by Abhiram Nandakumar and Sayantani Ghosh in Bangalore; Editing by Don Sebastian)

Rambus stock halted six times in frenetic trade

Rambus stock halted six times in frenetic trade

Stock Market Predictions

NEW YORK (Global Markets) - Trading in Rambus Inc (RMBS.O) was halted six times on Friday as the stock hit circuit breakers after rapidly rising and then falling through the 10 percent threshold in a matter of minutes.

A federal appeals court on Thursday ruled that Rambus did inappropriately destroy documents related to patent cases, but it overturned a lower court's dismissal sanction. Rambus shares fell as much as 20 percent. The shares previously had risen more than 10 percent.

Rambus shares were down 16.5 percent at $16.08 in early afternoon trading. At nearly 7 million shares volume was over eight times the daily average.

Circuit breakers were introduced after the financial crisis as a way to reduce volatility. Critics say they prevent a stock from going through necessary price adjustments when important news breaks. Such a large number of halts in Rambus stock is likely to reignite that debate.

(Editing by Leslie Adler)

Citi reinstates quarterly dividend at 1 cent

Citi reinstates quarterly dividend at 1 cent

Stock Market Predictions

NEW YORK (Global Markets) - Citigroup Inc (C.N) declared its first dividend in more than two years on Friday, announcing it will pay a penny per share on June 17, but analysts said the bank could take a while to pay the kinds of dividends that its rivals do.

The third-largest U.S. bank, which needed $45 billion in U.S. government bailouts to survive the financial crisis, said in March it planned to reinstate its dividend after shrinking its number of shares outstanding with a 1-for-10 reverse stock split.

The bank's payout pales in comparison to stronger rivals, amounting to a dividend yield of a tenth of a percent for the shares, compared with JPMorgan Chase & Co's (JPM.N) 2.3 percent.

Citigroup Chief Executive Vikram Pandit has said the bank will likely wait until 2012 to increase the amount of capital it returns to shareholders, through increased dividends or share buybacks.

The bank has posted five consecutive quarterly profits but it has struggled to generate the same level of earnings as rivals like JPMorgan Chase.

Bank investors are skeptical that the company will boost its flagging revenues enough to significantly increase payouts by next year.

"I'll believe it when I see it," said Matt McCormick, a portfolio manager at Cincinnati-based Bahl & Gaynor Investment Counsel, which specializes in dividend-paying stocks.

The bank shrank its outstanding share count on Monday, to 2.9 billion from 29 billion, through the reverse share split. Citigroup's share count ballooned during the financial crisis, as the U.S. government stepped in three separate times to rescue the bank and then started selling off its resulting one-third common share stake.

In December, the government finished selling all of the common shares it took in the bank as part of its bailouts, but Citigroup is still struggling to grow its revenues.

Investors, who see reverse splits as cosmetic fixes to what are often fundamental problems, have not rewarded Citigroup. The bank's shares are down more than 7 percent since they started trading on a split-adjusted basis on Monday. They were down 1.7 percent at $41.71 on Friday afternoon.

Citigroup last paid a 1-cent dividend in February 2009 as it teetered on the brink of collapse during the crisis. The dividends it will pay out now amount to about $116 million a year, or about 1 percent of its full-year 2010 net income.

JPMorgan, which pays a dividend of a quarter per share, is paying out closer to a quarter of its 2010 net income in dividends.

In 2006 Citigroup paid out $10 billion of dividends, amounting to about 45 percent of its full-year earnings.

The bank first said it would reinstate a dividend in March, after a slew of stronger rivals received regulatory authorization to lift their dividends by as much as 20 cents a share and buy back stock.

The Federal Reserve concluded a second round of stress tests of the largest U.S. banks then, and gave some the green light to boost shareholder profits. But the Fed restricted 2011 dividend payouts to 30 percent of each company's expected earnings for the year.

(Reporting by Maria Aspan; Editing by Gerald E. McCormick, John Wallace and Richard Chang)

Yahoo battle with China's Alibaba intensifies

Yahoo battle with China's Alibaba intensifies

Stock Market Predictions

NEW YORK (Global Markets) - Yahoo Inc's battle with Alibaba Group intensified on Friday as they issued contradictory statements over the Chinese company's transfer of a major Internet asset to its chief executive.

Analysts said the handover of Alipay, an online e-commerce payment system similar to eBay Inc's PayPal, to Alibaba Chief Executive Jack Ma has reduced the value of Yahoo's 43 percent Alibaba stake. Alibaba also operates China's largest e-commerce company, Alibaba.com Ltd.

Yahoo said it had been blindsided by the deal, while Alibaba countered that Yahoo was aware of the transaction by virtue of having a board seat, now held by former Yahoo Chief Executive Jerry Yang, who is also a Yahoo director.

Shares of Yahoo have fallen as much as 14 percent since the company first disclosed the transfer in a regulatory filing after markets closed on Tuesday.

The feud underscores the tense relationship between Ma and Carol Bartz, Yahoo's chief executive since January 2009.

Bartz is under pressure to boost revenue and drive more visitors to Yahoo, which is losing ground to rivals including Google Inc and Facebook. The Alibaba stake is considered one of Yahoo's most valuable assets.

Both Bartz and Yahoo Chairman Roy Bostock are in the "hot seat," said Eric Jackson, managing member of the hedge fund Ironfire Capital, which owns Yahoo stock.

"At best it makes it look like Yahoo -- Jerry Yang especially -- has been out of the loop," he said. "The Yahoo board has to be looking into the mirror and saying: 'What do we need to change to make this right?'"

In afternoon trading, Yahoo shares were down 61 cents, or 3.6 percent, at $16.56, after earlier falling as much as 7 percent to $15.96. They had closed Tuesday at $18.55.

BATTLE OVER BASICS

Yahoo invested $1 billion in Alibaba in 2005, but Alibaba has made clear it wants to buy out Yahoo's stake.

"I just don't trust them," Ma told Forbes magazine in its April 11 edition.

Bartz told Global Markets in September she has no plans to sell.

Some analysts estimate that Yahoo's Asian assets, including a 35 percent stake in Yahoo Japan Corp, represent at least half the Sunnyvale, California-based company's market value.

Yahoo and Alibaba do not agree on when Alipay was transferred to Ma, or whether Alibaba's board knew about it.

Alibaba said the board was told in July 2009 that the transfer had occurred. Yahoo said the transfer happened in August 2010, giving Ma full ownership of Alipay, and Yahoo did not learn of it until March 31, 2011.

Japan's Softbank Corp also owns a stake in Alibaba. Four directors make up Alibaba's board, including Yang and Softbank founder Masayoshi Son.

"I find it impossible to believe, as a rational matter, that a board member from Yahoo could sit through a proceeding whereby a valuable asset was transferred to the Alibaba CEO, and not object," said Manning Warren, a corporate law professor at the University of Louisville.

In a statement on Friday, Alibaba spokesman John Spelich said directors were "told in a July 2009 board meeting that majority shareholding in Alipay had been transferred into Chinese ownership."

According to Alibaba, the move was necessary to comply with Chinese law, to ensure Alipay could continue operating.

Later Friday, Yahoo stood by its earlier statement that the Alipay deal occurred "without the knowledge or approval of the Alibaba Group board of directors or shareholders."

Yahoo said it is in "active and constructive" talks with Alibaba and Softbank "to preserve the integrity" of its stake.

"It's surprising you can have that sort of communication lapse," said Ken Sena, an Evercore Partners analyst.

David Einhorn's hedge fund Greenlight Capital last week took a "significant" stake in Yahoo, saying its Alibaba interest could ultimately be worth more than Yahoo is now.

LEGAL RAMIFICATIONS

Warren said Yahoo might try to sue Ma under Delaware law, saying Ma would have to show that his acquisition of a major asset from his own company had been conducted fairly.

Meanwhile, if in fact Yahoo had been in position to stop the Alipay transfer, Yahoo itself might be sued, said Mark Rifkin, a partner at Wolf, Haldenstein, Adler, Freeman & Herz.

"It could even give rise to a Yahoo shareholder claim against Alibaba," given the 43 percent stake, he added.

Disputes such as this could dampen U.S. investors' enthusiasm for companies based in China, Ironfire's Jackson said. "I definitely think it can spook people," he said.

(Additional reporting by Aditi Sharma in Bangalore; editing by John Wallace and Gerald E. McCormick)

Yum plans to buy out Little Sheep for $586 million

Yum plans to buy out Little Sheep for $586 million

Stock Market Predictions

HONG KONG (Global Markets) - Yum Brands Inc (YUM.N), parent of the KFC, Taco Bell and Pizza Hut fast-food chains, has offered to buy out China's Little Sheep (0968.HK) for $586 million, paying a premium to introduce the popular hot pot chain to a global audience and sending the Chinese restaurant shares to a record.

Analysts said the deal was positive for both Yum Brands as it expands in China and for Little Sheep, which has more than 300 hot-pot restaurants, primarily in China, as it would help save costs.

Little Sheep said China's highly fragmented restaurant industry had seen competition intensify in recent years, and going private would reduce its exposure to market volatility and give it quicker access to growth capital.

"The deal is a positive for both parties," said Ample Capital analyst William Lo.

"It has synergy for both Yum and Little Sheep as they can share and save costs on logistics. (Little Sheep) can share costs with Yum's other operations such as Pizza Hut in China."

Lo said there was still room for Little Sheep to grow in China.

Yum offered to buy out most of the shares of Little Sheep that it does not already own at HK$6.50 each in cash for up to HK$4.56 billion, taking its stake to 93.2 percent from 27.2 percent. The price represents a 30 percent premium over the previous close.

"It is positive to Little Sheep with a premium of 30 percent, while Yum can increase product diversity," said Pacific Epoch retail analyst Marie Jiang.

Global food operators wanting to enter the China market have had to tread carefully in the past few years.

Coca-Cola Co (KO.N) launched a $2.4 billion bid for Chinese juice producer China Huiyuan Juice Group Ltd (1886.HK) in 2008 but the deal was blocked the following year by the government on competition concerns.

Little Sheep is seen differently in terms of brand-name effect and the deal with Yum is expected to have a higher chance of receiving regulatory approval, Jiang said.

Yum had said earlier that it would wait for approval from regulators before making a formal offer for the remaining shares in the chain.

SHARES AT RECORD HIGH

News of the deal lifted Little Sheep shares to an all-time high of HK$6.38 on Friday. The stocks ended up 24.5 percent at its record close at HK$6.14. This was compared to a 0.88 percent gain in the benchmark Hang Seng Index .HSI.

"The (offer) price is fair and is not expensive as it represents about 30 times P/E, which is similar to other restaurant operators such as Ajisen (China) Holdings Ltd (0538.HK)," said Lo from Ample Capital.

Analysts said the deal also reflected a strategy by global food operators, such as McDonald's Corp (MCD.N), in tapping the China market by localizing their products to suit local tastes.

Based in China's Inner Mongolia province, the Little Sheep chain is known for its fresh mutton and beef, colorful restaurants. It is also known for its environmentalist consciousness in using paper less offices, energy-saving electrical appliances and discouraging the use of disposable utensils.

"China is an important market for Yum Brands," said Sam Su, chairman and chief executive of Yum's China Division.

"In the long term, with its global business network and successful brand-building experience, Yum will work with Little Sheep to explore effective ways of introducing the hot pot concept and the Little Sheep brand to a wider global audience," Su said, without giving a timetable.

Chinese hot pot is meat and vegetables cooked in a variety of broths at one's table. Popular with families and groups, diners order raw chicken, fish, other meats and vegetables they cook themselves in a central pot or individual pots at each seat.

Little Sheep would stick to its plan of opening 40 outlets this year in China, Chairman Zhang Gang told a news conference.

Zhang and another founder Chen Hongkai will hold 6.8 percent of the company after completion of the proposed deal.

The China division of Yum Brands opened more than 500 new restaurants in 2010. KFC continues to be the number one fast-food brand in the mainland with more than 3,200 outlets in more than 700 cities. It also has 520 Pizza Hut restaurants in more than 130 cities.

(Additional reporting by Terril Jones in Beijing; Editing by Chris Lewis and Dhara Ranasinghe)

LSE, TMX Group results top forecasts

LSE, TMX Group results top forecasts

Stock Market Predictions

LONDON/TORONTO (Global Markets) - The London Stock Exchange and Canada's TMX Group reported forecast-beating results on Friday as they applied for regulatory approval of their $3 billion deal to join forces.

Shares of the exchanges, both pressured by competition from alternative trading upstarts, rose after the results.

First-quarter profit at TMX, the operator of the Toronto Stock Exchange, rose 13 percent to C$64.3 million ($66.8 million), while revenue climbed 17 percent to C$174.7 million, on record volume and robust equity financing.

"I, along with maybe one or two others were already on the high end of Street estimates and they exceeded our estimates by a country mile," said National Bank Financial analyst Shubha Kahn.

The LSE exchange reported 2010 profit up 22 percent at 341 million pounds ($555.5 million), well above a forecast of 314 million in a poll of 14 analysts.

Revenue increased 7 percent to 675 million pounds, above analyst expectations of 651.1 million. The total dividend for the period was 26.8 pence, above a forecast 25.9p.

"We have seen strong growth in our fixed-income businesses, exchange-traded funds and derivatives. We are also starting to see positive impact from technology sales," Chief Executive Xavier Rolet told Global Markets Insider TV in an interview.

The exchanges formally applied on Friday to have the deal approved by authorities in Ontario, Quebec, Alberta and British Columbia. The provincial regulators, along with the federal government, have a say in the deal first announced February 9.

The applications initiate a process that could last for months -- the TMX and the LSE are confident it will close sometime in the fourth quarter.

The would-be partners promise to create a transatlantic exchange and powerhouse in mining and resource equity that would do $4 trillion in annual trading.

Canadian critics fret that control of a national institution will fall into foreign hands.

"We have made this investment because we are convinced this merger represents an unparalleled opportunity for our company," Chief Executive Tom Kloet said.

MARKET SHARE EROSION

But the market share of both firms has been eroding. The LSE's share of domestic equities trading -- historically its top earning business -- has slumped in the past three years, hurt by the likes of Chi-X Europe and Bats Europe, whose parent filed for an IPO on Friday.

Last month the LSE's domestic market share fell below 50 percent for the first time in the UK exchange's 210-year history, Thomson Global Markets data showed.

The alternative trading platforms remain a formidable competitive threat to TMX as well.

The TSX and TSX Venture Exchange had a combined market share of about 65 percent by value and 68.8 percent by volume in the last quarter. Overall combined market share was down slightly quarter over quarter, according to data from the Investment Industry Regulatory Organization of Canada.

Both exchanges have tried to diversify business to counter the threat. Rolet has looked to derivatives trading, clearing and technology services for growth, and credited his strategy for the better-than-expected results. His boldest move is the proposed tie-up with TMX, a deal that will enable the UK exchange to tap into TMX's stable of booming mining firms.

TMX is in the process of launching its own alternative trading system, TMX Select. It has reduced fees and introduced rebates for certain services, and it launched services that allow for anonymous trading.

"If those initiatives bear fruit, it should offset some of the market share erosion, or at least stem some of the market share losses," said Khan.

LSE stock closed up 1 percent having risen more than 7 percent earlier in the session. TMX shares closed up 1.83 percent at C$41.75 late afternoon in Toronto, an implied premium relative to LSE's offer of $39.75, according to a CIBC research note.

(Editing by Sophie Walker, David Holmes)

($1 = 0.6140 pound)

($1 = $0.968 Canadian)

FDA clears new Merck drug for hepatitis C

FDA clears new Merck drug for hepatitis C

Stock Market Predictions

WASHINGTON/NEW YORK (Global Markets) - Merck & Co (MRK.N) won U.S. approval on Friday to sell a new drug considered a major advance against the liver-destroying hepatitis C virus.

Victrelis is expected to help transform treatment of the potentially fatal disease with higher cure rates and shorter courses of therapy for some patients.

A similar medicine from Vertex Pharmaceuticals Inc (VRTX.O) is poised to win FDA clearance later this month. Industry analysts predict sales of more than $1 billion annually for each drug with the Vertex product dominating the market.

Merck shares rose 0.6 percent in after-hours trading to $37.33, up from their $37.08 close on the New York Stock Exchange. Approval of Victrelis was widely expected after a Food and Drug Administration advisory panel recommended the drug in an 18-0 vote in April.

Doctors say tens of thousands of patients have been delaying treatment in anticipation of the new medicines, which still must be taken in combination with older hepatitis drugs. About 170 million people around the world are infected with hepatitis C.

"There are so many patients who are just waiting for a new treatment option. There hasn't been anything new in 10 years," said Dr. Eliav Barr, Merck's head of infectious diseases research.

"We're just thrilled and can't wait to get the medicine out the door to patients," Barr said, adding that Merck was ready to begin shipping the drug within the week.

The cure rate for Victrelis reached 66 percent in Merck's studies, an improvement over the 35 to 40 percent seen with current drugs, but less than the 79 percent reported for newly treated patients given the Vertex drug, telaprevir.

"Victrelis is an important new advance for patients with hepatitis C," Dr. Edward Cox, head of the FDA office of antimicrobial products, said in a statement.

The FDA approved Victrelis for adults with hepatitis C who were never treated or who failed previous treatments.

In the United States, 3.2 million people have hepatitis C, a blood-borne disease that can lead to chronic liver problems, liver cancer, cirrhosis and death. The disease is the leading cause of liver transplants in the U.S.

Both the Merck and Vertex medicines in combination with standard drugs cured some patients in half the time of the current therapy of the injectable drug interferon and a pill called ribavirin. The older drugs require almost a year of treatment and often cause flu-like symptoms that are tough to tolerate.

Prescribing instructions for Victrelis suggest that some patients with early responses to the drug can stop treatment after 28 weeks, while some others can stop at 36 weeks.

The most common side effects reported with Victrelis were fatigue, anemia, nausea, headache and taste distortion, the FDA said.

The drug label recommends monitoring for anemia.

Hepatitis C is spread mainly through sharing needles such as those used for illegal drugs and tattoos, or through blood transfusions before 1992 when screening began. Many people who are infected do not know they have the virus and show no symptoms.

The new medicines work by blocking a protein called protease that the virus needs to replicate. The generic name for the Merck drug is boceprevir. It must be taken three times a day with food.

(Reporting by Lisa Richwine and Bill Berkrot; Editing by Carol Bishopric)

U.S. court finds against Rambus, shares plunge

U.S. court finds against Rambus, shares plunge

Stock Market Predictions

WASHINGTON (Global Markets) - A U.S. appeals court found memory chip designer Rambus Inc was wrong to shred hundreds of boxes of documents relevant in two patent infringement lawsuits it filed, sending its shares down sharply.

The U.S. Court of Appeals for the Federal Circuit, in one of two parallel rulings, said on Friday it was clear Rambus had destroyed documents but it was not clear the action was so serious that a lower court should have tossed out its suit.

It sent the dismissal back to the U.S. District Court in Delaware, adding that the lower court might still decide the shredding was serious enough for Rambus to lose the case it brought against Micron Technology, the top U.S. maker of memory chips for computers.

In the other ruling, the appeals court found Rambus destroyed documents related to a patent suit it successfully brought against Korea's Hynix Semiconductor. It asked a California court in that case to review its ruling in view of the document destruction.

The decisions slammed Rambus' shares, which ended Friday at $15.83, down 17.9 percent on Nasdaq.

Rambus executives said on a conference call they had not decided if they would appeal Friday's decisions.

According the court record, Rambus held at least two "shred days" as part of a strategy to get ready for litigation over its patents.

Despite a stated goal of getting rid of all documents once they were old enough, employees were instructed to look for helpful documents to keep, documents that would help prove Rambus had intellectual property, the appeals court said.

According to a document German chipmaker Infineon filed in a separate case, Rambus employees were told there would be "pizza, beer, champagne, etc." at a 1998 shred day.

SHRED DAYS

"It is undisputed that Rambus destroyed between 9,000 and 18,000 pounds of documents in 300 boxes," the appeals court said in its majority opinion in the Micron case.

Judge Arthur Gajarsa dissented in part, saying the lower court's dismissal of Rambus' suit because of the shredding should have been allowed to stand.

Rambus designs memory chips and licenses technology used in them to other chipmakers.

Investors had been watching for the appeals court's rulings. If the court had ruled for Rambus it would have helped it negotiate additional licensing arrangements.

Much of Rambus' income has come from patent litigation against companies it accuses of not paying for its technology.

"We are very disappointed with the decisions in these cases," said Thomas Lavelle, senior vice president and general counsel at Rambus. "We are hopeful when the district courts reconsider these decisions, they will find, as we believe, there was no bad faith and no prejudice."

One analyst said the share price drop was over the Hynix lawsuit. "I think the market is reacting to the technical finding of (document) spoliation and the near-term loss of the roughly $400 million that was waiting for it in the Hynix case," said Michael Cohen, principal of MDC Financial Research, LLC, who owns Rambus stock.

FRUSTRATING OPPONENTS

The appeals court said "it was not clear error" for the Delaware court to conclude that Rambus' document policy was aimed at boosting its litigation strategy by frustrating the fact-finding efforts of opponents.

Micron had won in the Delaware court when a judge invalidated 12 Rambus patents, citing document destruction by Rambus as the reason.

But Rambus won against Hynix in a separate trial, when a federal judge in California found that nine Rambus patents were valid and had been infringed.

Trading in Rambus was halted six times on Friday as the stock hit circuit breakers after rapidly rising and then falling through the 10 percent threshold in a matter of minutes.

At nearly 15 million shares traded, volume was 18 times the daily average.

Messages left at Micron and Hynix offices seeking comment were not returned.

Rambus has filed lawsuits against a long list of technology companies in the past decade. Samsung Electronics settled a patent suit with Rambus in January 2010 in a deal that could cost it $900 million.

Friday's cases were: Hynix Semiconductor v. Rambus, 09-1299 and Micron Technology v. Rambus 09-1263 in the U.S. Court of Appeals for the Federal Circuit.

(Reporting by Diane Bartz; Additional reporting by Noel Randewich in San Francisco; Editing by Tim Dobbyn)