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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: John Curtis who wrote (14170)9/2/1999 3:32:00 PM
From: MGV  Read Replies (2) of 27311
 
The critical point is at what cost to VLNC. The JIT financing smacks of desperation. The confirmation? Look at the prices at which they are selling equity in each successive month. They need more - much more -capital than they keep getting.

They have now sold in three successive months approx. $3 Million of shares at successively lower prices of $6, $5, and $4. Among other insights, it raises questions about the judgement of management and, in particular, the CFO. The decision to raise only $3 Million in June cost them big time. Capital is about 1/3 more expensive in the latest desperation tranche.

Who said this?

VLNC desperately needs its share price to go up yet the share price keeps going down. They have been trying to get their share price up since at least February and could not. Finally, in June and July they sold equity at then low prices because they were desperate for capital. Why were they desperate? Why do I characterize it that way? There are a number of signals. One prominent one is that they sold minimal amounts each time - apparently, given their balance sheet and income statements, only enough to make it "one more month" then "one more." There is no question, VLNC is in a dire situation, racing the clock now and apparently losing the race.

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Message 11107209
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