Rich,
Just came across the news. The following section caught my attention:
The full amount of the cash settlement and associated legal costs to date has been either previously expensed, reserved for or fully covered by the company's insurance carriers. Under the terms of the settlement Valence will pay $1.3 million in cash and 950,000 shares of common stock to the class fund. The company will take a charge for the impact of the stock portion of this settlement during the fourth quarter ending March 26, 2000.
That is, the cost of settlement has been expensed, reserved or covered by insurance carriers. It is not coming out of company current cash flow, meaning the least impact plant expansion and production.
Long, long ago, I pointed out a great negativity or lack of credibility pulling VLNC down. Now, I see that three out of four factors have been corrected or resolved positively.
(1) Capital Guardian investment ($32MM) (Note: one of the stipulations was that the funds from equity will not be used as part of lawsuit settlement. Forewarning!)
(2) Analyst's coverage (CIBC) with a definite price target
(3) Law suit settlement. (This will eliminate the "bad blood" and negativity (Re.: SF Examiner, Street.com, etc.)
(4) Timely delivery of batteries, Consumer acceptance of VLNC batteries, Battery performance, UL certification, etc.
I am optimistic about item (4) and hope to learn more about (4) at the CC and the SH meeting. The VLNC credibility is almost restored. That should mean: higher stock prices and momentum. all imo. Ram
Edit - Also note that the charge off will be in the March QTR. Soooo, the June QTR which I have been anxiously waiting for will be a solid one! Ram |
