VLNC makes better fire-bombs than batteries?!
sfgate.com
Sorry if this is old news. Thought someone might be interested here about it though.
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Silicon Valley is the epicenter for the fastest creation of wealth in history. But the high-tech miracle has a dark side: Untold stories of ruined investors, betrayed entrepreneurs and regulators who are overmatched and overwhelmed.
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In 1989, Lev Dawson scoured Stanford University's Jackson Library, searching for a shot at Silicon Valley gold.
He found it in an unproven idea for making laptop and cell phone batteries smaller, lighter and longer-lasting.
With venture capital backing, Dawson created Valence Technology Inc., and during the next four years the batterymaker issued more than $167 million in stock and signed potentially lucrative contracts with Motorola and Hewlett-Packard.
Unfortunately, the batteries had a few problems. They sparked and exploded and burned. One burst into flames so intense that it melted through the factory's tile floor and into the concrete foundation. A senior company engineer said carrying a battery was like having ``a bomb in your pocket.'
But word of the batteries' failures would not get out for several years. By then, Dawson was farming sweet potatoes in northeast Louisiana, having unloaded more than 2.4 million shares of his Valence stock for almost $41 million.
Public stockholders, though, were almost wiped out. Relying on company assurances that all was well, they bid up the stock to more than $25 a share before the truth emerged in 1994, and the price plunged to $3.25.
Jim Varano, a 53-year-old pharmacist living near Boston, believed Valence's prospects were so promising that he borrowed money for a $320,000 stake in the company. After his investment evaporated, he had trouble sleeping, working and paying his sons' tuition.
Today, he minces no words: ``They're crooks and swindlers.'
In recent years, Varano and tens of thousands of investors like him have filed lawsuits accusing Dawson and other Silicon Valley executives of securities fraud, insider trading and legal and ethical misconduct.
The executives -- including Dawson -- deny any wrongdoing. |
