VALENCE TECHNOLOGY (VLNC) Message Board

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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Rich Wolf who wrote (15033)	10/5/1999 2:36:00 AM
From: Larry Brubaker	Read Replies (1) of 27311

One other major flaw in your wild theory that Castle Creek was selling shares they had acquired to box their shorts, Rich. The trading range of the stock all spring was between $6.5 and $8.5. We both now agree that Castle Creek was probably responsible for supporting the stock at $6.5 and resisting at $8.5. Although I had been suggesting this all spring, and it was not until the last month or so that you came to agree with me. Where we diverge is how they supported the stock. I think they covered some of their shorts at $6.5, while shorting more at $8, therefore, the steady increase in the short position. You think they boxed their shorts at $6.5, and used these shares they acquired to drive the price lower after the variable conversion took effect at the end of July. The problem with your theory, Rich, is that Castle Creek would have had to sell these shares at a substantial loss in order for your theory to be correct. They would have purchased the shares at no less than $6.5 and would have sold them at as low as $4.25 or so. I think Castle Creek is smarter than that.

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