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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: MHS who wrote (14504)9/11/1999 9:49:00 AM
From: Dennis V.  Read Replies (1) of 27311
 
From last fall, when the "death spiral" theory was floated here, there were intermittent arguments concerning the level of commitment reflected by insider buying. Zeev maintained that since the amounts were so small relative to the insiders' personal wealth, that such holdings could be discounted. I think the shorts' equated this to low commitment, and in view of the variable conversion clause with CC, could move against this company with impunity. Perhaps, they did not give credence to the possibility that the insiders would add substantially to their relatively small investments. Yet, the disproportionality actually made this more likely, assuming that the insiders saw their original investment as marching toward success. Shorts seemed to deny this in their animus toward Valence. This is probably the reason they were so shook when I mentioned Daddy Warbucks. At least, the reaction was more than I expected. After all, who throws good money after bad? Rhetorical question? I think so, sensational newspaper articles about Berg notwithstanding. The BOD seems ready to use their weight and the new CFO has found the leverage he needs. This appears to be the flaw in the spiral theory. A patented and routinely successful plan of attack has run into a hitch.
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