Tickertype,
I was hoping that you would publish a summary of the call like the last time. I was occupied all day. I did not get a chance to listen to the conf call. I did see briefly the intraday trading activity. Interesting to see the price going down!
Based on some of the messages relevant to the conf call, I conclude that the call was positive.
(1) Lev's retirement is positive. Although one poster called Lev's retirement a "bombshell", in my book, Lev's retirement is good news and signals a turnaround for VLNC. We are told that he was called in to save the sinking ship with great battery technologies (400 patents). Now that he saved the VLNC battery commercialization project and his 1.8MM shares, it is time for him to relax.
An important aspect of battery production he discussed during conf calls is quality control. Good quality control and yield improvements can be a great competitive edge over other companies and translate into several millions $ that investors do not seem to appreciate.
(2) An important aspect of the PO announced today is not the dollar volume, viz $2MM. The significance was that VLNC and Moltech (previously EPS) are working together for the sale of li poly batteries in commercial volume, OEM designing and testing, etc. I was a bit nervous when Moltech, VLNC's competitor, bought EPS. Lev's statement in the news release, tongue-in-cheek, cleared these concerns today. Given EPS losses (a reason they were sold by Ralston Purina) they have an incentive to promote sales of VLNC products. Glad Lev did not buy them out.
(3) Based on SI posts, Lev's claim of $45MM rate and $80MM middle of next year, will show real revenues and earnings soon. In any manufacturing business, things (production efficiency, quality, yield, margins, etc.) get better with time.
(4) intraday chart was interesting! Price gain of 9/16, to 6 1/16 on 1.09 million shares is not a joke! This is definitely not motivated by tax loss selling or leaky floorless or death spiral scenarios! Last week gave a clue: small price appreciation on a large volume (600K, four times the daily average). Today we have about 6 times the daily average. What the "tea leaf" may tell us?
(a) shorts could have had plans to dump shares after a negative conf call. Why they were getting ready to sell so confidently? (1) the much-awaited CC conversion did not happen last two weeks leading some to believe that CC was skipping the lowest conversion price because CC was expecting much lower prices. For them, it was reasonable to expect a negative call in the following week, since CC was not making any bullish moves. (2) as of Nov 10, a day before the conf call there was no news of PO or any positive news about VLNC (3) the frustration level of nervous longs reached a peak when there was no news about PO, especially after they saw the Hanil's news release in the Korean press (4) the 10Q released that day before did not have any surprises as usual. May be, a majority of the nervous longs were ready to sell if the call turned negative. Shorts probably wanted to exploit the nervous longs' frustration and CC's share supply(?).
The stock gapped up from 5 1/2 to almost 6 1/2 with almost 320K shares traded on the news of $2MM PO. Right after it reached 6 1/2, share dumping started and, the price went down as low as 5 1/2, filling the gap.
It's hard to believe that CC will attempt (N+1)th time to initiate a death spiral. The price stabilized and remained flat toward the end of the day.
What will start an uptrend? When a major PO (say, above $50MM) is announced. That's when the short squeeze will help the longs on the price immensely. Until then, I'll put my shares away in a safe locker for the next 24 months, sit back and relax. Ram |
