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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: mooter775 who wrote (16915)12/11/1999 9:14:00 AM
From: Zeev Hed  Read Replies (2) of 27311
 
mooter, positive cash flow might not be in for another 18 months, when their annual sales rate should exceed $100 MM. I do not think that they will be profitable for most if not all of next year, since I believe they'll need sales rate of about $75 MM to be profitable. Under normal circumstance, getting to that $100 MM in sales might require in excess of $60 MM in financing (about $35 MM in working capital and another $25 MM to cover losses and some additional capital). All these however, are of little importance to the stock price, first because they now have access to about $40 MM of working capital from the NDB (?). All they'll need to raise is the $25 MM Lev mentioned. Of course, if the price stays around the $20 level, I think it would be wise to raise twice as much. Going forward, you have to watch for Mr. Murphy's games, things can go wrong, and usually they do.

Good luck.

Zeev
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