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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: kolo55 who wrote (18913)3/31/2000 9:31:00 AM
From: kolo55  Read Replies (2) of 27311
 
What happened on Wednesday?

There were two rumors being pushed around the investment community on Wednesday. The first, was that Globalstar was unhappy with the quality of the batteries supplied with the satellite phones from Qualcom. The rumor then when on to say that Valence was losing the Qualcom business.

Of course it is true that Qualcom was unhappy with the quality of the batteries originally supplied by HET, a division of TDI, which in turn is part of Thomas and Betts. This is why Qualcom turned to Valence last fall.

A second rumor was also passed around... It read as follows:

1) MOT has won the right to do the packaging for the Globalstar order. They will be sourcing the batteries for the phones from Toshiba and 2 other companies.

2) Alcatel has qualified 3 Japanese producers for LiPoly batteries that are willing to produce at $6 per. VLNC was at $10. VLNC probably won't get more than 10% of the volume they were expecting.

So, their $1.5M order and their $15M order are both in trouble. Nothing else is on the table with a near term catalyst. Opco guy is still clueless.

According to the company these rumors are false. It appears the source for the first claim is likely originating from someone at Motorola. It is possible that MOT did get some Globalstar battery business, but it could be for one of the other suppliers of Globalstar phones, not Qualcom.

The bears used this to scare the holders, then hit the stock in a massive short selling attack, augmented by BEST selling .

I bought heavily this week, especially on Wednesday. This is a golden buying opportunity, especially because BEST has likely gotten close to finished with their hedging.

Paul
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