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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: FMK who wrote (19038)4/7/2000 2:03:00 AM
From: Larry Brubaker  Read Replies (2) of 27311
 
<<I therefore believe this presents a wonderful buying opportunity because Valence share price has dropped far more than other tech stocks due to above conditions 1 and 2 and that its low share price is temporary.>>

Actually, Fred, there are plenty of tech stocks that have fallen much further than VLNC. My general observation of the NASDAQ decline is the ones that have fallen the most are 1) the ones that went up the most, and 2) did not have the fundamentals to support #1.

You seem to think that VLNC's rightful price right now is $40, which with 43 million fully-diluted shares equals a $1.6 billion + market cap. To me, that seems just a bit rich for a company that has generated $700,000 in product sales in its entire history. It is also a bit rich for any reasonable scenario of revenues and profits for the next couple of years.

Did you ever consider the possibility that the only reason the stock price got to $40 in the first place (given what we currently know about the fundamentals) was the now-dying tech stock tulipmania? A mania in which literally hundreds of stocks were priced far above any rational valuation? A mania that may very well be breathing its last gasp? If so, your suggestion to margin the stock may be a recipe for disaster.
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