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February 19, 1987

RODIME SHARES DANCE FOR JOY AS BUYERS GET THE 3.5″ DISK DRIVE PATENT MESSAGE

By CBR Staff Writer

Rodime Plc has finally been caught up in recent investor enthusiasm for the survivors among the disk drive manufacturers. The Glenrothes, Scotland company saw its share price leap 80 pence to 545p on the London Stock Exchange on Wednesday, and end the day on Wall Street nearly $2.50 up on the week at $9 even. By lunchtime on Thursday the price in London had bounded up a further 60 pence to 605p. The US price is more representative as there are so few shares in circulation on the London market. Reason for the sudden excitement is clearly the story we broke in the UK on Monday – that Rodime had been granted two patents on the entire concept of the 3.5 Winchester disk drive, and was going on the litigatious warpath against all other manufacturers (CI No 621). Rodime is demanding as its pound of flesh a healthy 7% royalty on every 3.5 Winchester sold, and on a market tipped to reach $1,000m a year by 1989, that certainly ain’t hay for a $100m-a-year company. Finance director Colin Grant says only that no-one should look for anything at the bottom line from the patents for some time yet, but its anyway very sanguine about the company’s mainstream business. The drive sector has been very strong in the last six weeks and we have finally been caught up in that. We also believe we are on the recovery path and despite not terribly good first quarter results at the beginning of the month, investors can see that we are in a very strong position in the market now with our new 3.5 Winchester products. For the record, the patents that Rodime is seeking to enforce against 3.5 market leader MiniScribe in court in Denver cover drives that have platters of between 85mm and 100mm diameter, record 600 tracks per inch, use open loop positioning technology, and store more than 5Mb. Rodime’s share price in London has struggled between 380p and 420p for several months despite reports from US rivals Seagate Technologies and Tandon that the drives market has been unusually buoyant. Results for the first quarter to December 31 showed a sharp turnaround on the previous quarter, with sales up 6% at UKP15.75m, and operating losses reduced by 36% at UKP1.936m.

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