Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: Razorbak who wrote (55893)	12/5/1999 8:15:00 AM
From: double-plus-good	Read Replies (1) of 95453

Razor, I wonder if you have an updated Altman view on Chesapeake. The recent upgrade from Dain Rauscher would seem to indicate that the balance sheet is substantially mended. I have noted that DR is slowly upgrading select EnP's though they are wading in slowly. I take that as their estimation that the worst of this sell-off is behind us. I note that you also hopped into EEE. Hard to say for sure the knife has finally hit some support, but it appears that all the news is out and any further selling will be of the tax related variety. I'll assume you applied Altman to 88 as well or you wouldn't have taken a position. On a slightly different and OT note, I've recently started taking advantage of the parade of BS (as in Bull S*) stocks that are being pumped and dumped to start establishing some short positions. I don't yet have the guts for NDX puts or even OEX for that matter. Its been suicide to try and play logic in this market, but I've taken note that the odds are significantly better getting short on some of these late blow-off cycle pumps that are now occurring. eg..ADSP, VONE not to mention RHAT and the other Linux wannabes I'd be curious to get an Altman perspective on one that caught my eye last week. Valence (VLNC) is a battery outfit that's been throwing away money for years and had to completely retool their production facility in N. Ireland after they revamped their battery design. They've been flooding the market with a combination of private placement shares and floorless convertibles. Only last week a new dilution hit the current holders. The private placement, though was followed closely by a press release with a paucity of details concerning a purchase order for cell-phone batteries to the tune of 20 million. Share prices leaped ahead and the level of enthusiasm on the SI and Yahoo boards is pretty high, very self-congratulatory and ebullient. After reading the 10k and Q's however, it appears that the first production line won't be available for another month or two and the second line won't be available for some months after that. It is with the second line that they plan to produce batteries for the hand-held and cellular market and for which the 20M order was made. basic problem as I see it is they are at risk of going belly up before they can get anything off the line. They reference needing another 25M from the financing well in order to complete the production facilities and safety test their batteries. They have used up a 10M line of credit with one of their directors (who came away with another snot-load of shares as a result) and have gone to the convertible and private placement well about 6 times now. My eyeball view of it says they have a snowballs chance of pulling it all off and that it makes for a great short. The chart looks like a mini-JDSU on the other hand. I'm wondering if the Altman view is as pessimistic as my own eyeball view and if you'd mind putting the balance sheet to the Altman test. I know JQP and Slider are both eyeballing stocks to short to balance their respective oil and gas investments. I'm still looking at OPEN, which appears to be another BS* pump. I know this is kind of off topic so we can move it to your Altman thread if that is preferable. I'm also curious if you were the one who mentioned UNT recently. I remebered it being briefly mentioned here by someone and after reading Dog's current ODB comments on how rig values are now traded almost exclusively in terms of share prices, it struck me that UNT is reckoned to be among the most undervalued in terms of their rig portfolio. Perhaps it is their EnP segment which is holding their share price down, but I wonder if UNT isn't one of the better values in the energy world. ++good

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