Another take on VLNC: The IP purchase has left them in the strongest position the company has ever been in. Manufacturing is still lagging, and they're at least 2 quarters behind where they should be on ramping up. But their IP guarantees significant revenues if ANYONE succeeds in commercializing li-poly batteries covered by the Belcore patents. VLNC's own batteries have very much impressed a number of companies that have been testing them, including Telecordia (confirmed in part by myself via OEM sources, also see MacOSrumors.com). Right now, the issues are supply and second sources, not demand, and, of course, the always present issues of cost, price, and profitabilty. But this is certainly not the time to be short VLNC, as any news on licensing deals, large format battery orders, or increased revenues from production ramp-up will send VLNC up. As for capital requirements, the question there is how dilutive additional capital will be. Berg is the investor of last resort, and will not let VLNC fail as long as he believes it has a chance. Typically he has lent money and picked up warrants AND a note in exchange, but he is certainly no Castle Creek -- he is a long-term holder, and there will be no leakage from his positions. I was disappointed by the latest conference call and the news on production, but the IP news makes it far more likely there's a strong upside to VLNC than when it was relying on a manufacturing-only strategy.
To answer Zeev's question, the last big purchase from Berg was on the open market. It was the day the NASDAQ tanked big in May, and he put a bid in for 100K at 15 or 16 -- I forget which -- and held VLNC up for a couple of hours while the market tanked around it. I was watching it in real time, and it was something to behold the huge bid get nibbled away. I assumed it was Berg, and the insider buy information confirmed it. He did the same thing for IDTI when it was pushing the low single digits, and for VLNC at about 3 1/2 in '98. |
