Hello All,
It is difficult to convey my feelings regarding the damage done by what appears to be a well-coordinated short attack concurrent with hedged lawsuit settlement shares hitting the market. It is astonishing that the stock price drops as the the company is accepting more orders and ramping up shipments of what many believe is the the best product available
Valence batteries were shown to be far superior to a competitor's. When the competitor's contract was canceled in favor of Valence, it was rumored that Valence had lost the contract. A strong plus for Valence was instead presented as a "mistaken identity" to help drive the stock price down.
I was pleased to see Oppenheimer reiterate their strong buy rating and $50 target. I did hear a comment that Valence senior management believes they can easily double Oppenheimer's production numbers. It is easier for analysts to raise their estimates without criticism.
Here are three posts from the Yahoo thread by someone I met at the shareholders meeting that provide an excellent summary of Valence's state of affairs:
<<Doubt the QCOM G* phones with Valence cells are in anyone's hands yet. Here's the timeline:
Valence did the setup and qualification of the lines in Dec-Feb, and the company gave us a 'thumbs up' from the QCOM head of quality control at the shareholders meeting.
PR a few weeks after that indicated the shipping of the first production cells for this product. These cells were shipped to Moltech for repackaging, so *maybe* Qualcomm's phone manufacturer has now received the battery packs from Moltech.
So are these the cells available for shipping, as per mkt_e's URL to the G* site? Probably not yet... they have a small quantity of the original HET cells to unload. Though they go fast, since I heard of 30-50% failure rates on those. This is the reason that Qualcomm has dumped TDI/HET as a supplier, and asked Valence to take over ALL their production.
The facts of this will become apparent as more time goes by.
About those VLNC 'assembly lines'
by: skyhi111
Now to your final confusion: The assembly lines happen to be set up one way right now, but not as you think. And they will be subject to change, since some of the OEMs want more or fewer cells than a single line can put out. And lines 1-3 must have some parts replaced whenever you switch from making one cell size to another.
Currently:
* Line 1 (Klockner) is making the G* cells, but with the increased demand from QCOM (giving all their business to VLNC now), this line cannot put out enough cells (note: need to account for the cells for spare battery units as well, so double or triple the phone count of 600k G* phones by year end, and remember that two cells go into one phone battery unit). QCOM is negotiating with VLNC for some/all of the output from one of the Arcotronics lines, and will pay to retool.
* Line 2 (Arcotronics) is making StarTac-sized cells to PO#2 (at $10/cell, and $1M/mo, that's 100k cells/mo production rate).
* Line 3 (Arcotronics) *was* going to produce to PO #3 (Kyocera), but this production may be dovetailed with PO#2 on line #2, to free up line 3 for QCOM G*.
* Line 4 (FABL ?), the lease-back equipment from Alliant, which allows for computer-controlled variable-sizing of cells 'on the fly' (so to speak), is now running, and is available for any cell sizes from small MP3 players, to cellphones, to PDAs, to other tablet cells, to laptop cells, etc... All such products are currently being evaluated by OEMs, note.
Later in the fall, the company will take delivery of the 'line 5' which is a high-speed line that can also be adjusted without retooling. Expect it will be used for high-volume output of large cells for laptop orders.
Your comment about other potential customers is 'forward looking.' I do expect to see Ericsson and Motorola as customers, but they didn't sign up quickly enough, so are now in line behind other Valence customers, awaiting more buildout of the back-end processing (packaging, etc, I expect).
BTW, all cells are not priced the same, either. The $10 price was for the StarTac cells to PO#2.
Finally, you said <<And that is the other weak part of the story. If valence is selling the cells for $10 each, how some the pack costs so much??>> What are you talking about? What are you worried about? For StarTac cells, that's about $2.50/watt-hour. This is excellent pricing.
Valence's cost to produce (when producing at max capacity is less than $1/wh, including recovery of capital. Even our new self-proclaimed 'bean counter' can see what the margins are.
Enjoy.
Hope this helps.>>
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Thanks SkyHi for your summary.
Regards from FMK |
