Cautionary Tale: A Killing in the Stock Market

(June 6) -- A retired South Carolina teacher two weeks ago opened a piece of mail that he likened to getting kicked in the stomach:

"If you are receiving this letter, it means that I have taken, or at least attempted to take, my own life..."

The letter was written by a North Canton, Ohio, man named Barry Watzman. He and the recipient had never met face to face, but they did chat online for years via a bulletin board devoted to Rambus Inc., a small California company that designs memory interface solutions for computer chips.

Tragically, Watzman was not joking. A few days before his 61st birthday, he hooked a breathing tube up to the tailpipe of his car and drifted off to eternal sleep. However, he refused to go quietly into that good night: Watzman asked the retired teacher to post his long-distance suicide note on the Rambus forum.

"I have nothing left, NOTHING," Watzman confessed in his letter. "I never in my wildest dreams thought that this situation would end up this way."

Is this a cautionary tale about overzealous online investing or about the fragility of a solitary human being? Is Rambus' corporate roller-coaster ride an anomaly, or does it speak to larger issues of a dysfunctional legal and regulatory system?

At one time Watzman had racked up more than a million dollars in Rambus profits. But he never cashed out, hoping instead for an even bigger payday that never came. When the pendulum swing of the share price (which has fluctuated between $4 and $115 over the past decade) turned against him this past year, he tried to recoup his losses by doubling down with speculative options.

The strategy backfired to disastrous effect. Rather than hide his shame, Watzman opted to share it with those Rambus faithful who gather daily on the Investor Village website.

"The particular circumstance of using the Web is unusual, but this is something we ought to expect to see a lot more of," Yeates Conwell, professor of psychiatry at the University of Rochester School of Medicine and Dentistry and co-director of the Center for the Study and Prevention of Suicide, told AOL News. "To the extent that [the Internet] is a means of communication and suicide is an interpersonal act, it makes sense."

Conversation on the often raucous Rambus bulletin board turned suddenly sober and sentimental in the wake of the Watzman news. Posters reflected upon a death "in the family," mourning someone who, conventionally speaking, was a stranger to them, a disembodied voice on their computer screens. But "Ramboids," as the hardest-core stock holders are known, tend to be creatures of impassioned extremes.

"The board is filled with people who get seriously emotional about investing," said Jeff Schreiner, a senior semiconductor analyst at Capstone Investments, who has been tracking Rambus since 2000. "This is different from other companies."

Indeed, an Investor Village regular recently suspected that curiosity seekers were visiting the Rambus site just to read about Watzman and these exotic Ramboids: "Guest count unusually high. Sadistic! People coming to observe us and our behavior as if we were some remote rainforest culture."

Rambus is what's commonly referred to as a story stock, only in this case the narrative rises to the level of a sprawling, multigenerational Russian novel.

The company was founded in 1990 by two brainiac engineers, Mike Farmwald and Mark Horowitz. Rambus went public in 1997. Its business model is based on intellectual-property royalties charged for advances made in chip architecture.

Technically savvy investors like Watzman, a professional engineer until he was laid off and switched to part-time teaching, revel in the bits and bytes of data transfer. It's all about increasing the speed and capacity of memory controllers, which in turn stretch bandwidth to help make possible our ever-more-sophisticated video games, TVs and cell phones.

Proponents insist Rambus solved the "memory bottleneck" in chip design with game-breaker engineering. Critics say the technology is evolutionary, not revolutionary, adding that Rambus seduced some chip manufacturers into adopting its designs by not fully disclosing its ultimate pay-to-play patent intentions.

Those arguments have been publicly hashed out (also, rehashed and re-rehashed) for nearly 15 years. In courtrooms in Virginia, Delaware, California and Washington, D.C. At the U.S. Patent and Trademark Office, Justice Department, Federal Trade Commission and International Trade Commission.

Charges and countercharges have been traded ad infinitum involving collusion, document destruction and price fixing. Hundreds of millions of dollars in court costs ... and counting. Enough legal briefs filed to fill the Grand Canyon.

And, still, no definitive resolution.

Watzman's suicide note lambasted dithering judges, corporate patent pirates and even Rambus' bonus-happy executives. "Screwing shareholders," he proclaimed, "is 'the American Way.' "

His fellow investors at Investor Village groped for conclusions of their own regarding his demise. One quoted Shakespeare. One saw the hand of "Satan" at work. Some vowed to be more civil in their future message posts and less risky with their future investment dollars. "Nuke John," a battle-scarred veteran Ramboid, echoed a popular sentiment, noting Watzman was "a good man and he didn't deserve what the US justice system put Rambus investors through."

He leaves behind a mother, two adult sons and a wife. Debbie Watzman understandably wants nothing further to do with Rambus. She repeatedly warned her husband about placing too much faith in one company, about the dangers of unconditionally giving heart and soul to a stock.

"He was not a naive investor, but at the end it wasn't an investment strategy. It was gambling," she told AOL News. "I wish I could warn everybody who's involved with this thing to take a step back."

The International Trade Commission was due to announce a decision on May 26 in a high-profile case where Rambus asserts a European chip maker has infringed upon several patents. Ramboids were in no stepping-back mood.

May 26 would've been Barry Watzman's birthday. Many Ramboids saw poetic justice in the timing of those dual events. A favorable ITC verdict normally sends the winning company's stock price soaring. This could mark an important turning point in Rambus' intellectual property fight. It could mean a measure of redemption for poor Watzman.

Poetic justice didn't happen. The International Trade Commission elected to postponed its decision until late July.

Rambus stock tumbled 10 percent after that latest delay. But the price spiked back up this week: There are rumors a ruling is imminent in another case being heard in California federal court. Ramboids are again anxiously anticipating word from a judge. Waiting ... waiting ... waiting.


Great news could come any minute.

AOL News contributor Tom Dunkel owns stock in Rambus Inc.