Hi Chris, I have been looking forward to your technical interpretation. I agree the trend has been downward for a few days. It has been observed, however, that categorically, small stocks with no news have drifted similarly over the same period. Here are more reasons why I consider this as an excellent buying opportunity and have been acquiring all I can.
I spoke yesterday with a broker who follows VLNC closely. He stated his belief that if small stocks recover as a group, $25/sh will be "cheap" by December. He mentioned a client who shifted all of his account into VLNC about 10 days ago, not from reading anything on the internet, but after speaking with friends at a major telecommunications equipment mfr with a very bullish outlook for Valence.
Regarding your reference to "doubts settling in about the company's future"-- It seems we have been waiting a long time for an announcement regarding production qualification and understandably, some have become nervous or impatient.
During a conversation with the company I was told that their own testing of production samples could be completed by comparing about 10 day's data with extensive data from cells previously cycled 300, 500 and 1000 times etc. This would allow them to release recent line1 samples to OEM's before the end of June with statistical certainty of a given number of recharges and % capacity etc.
Also noted was the high consumption rate of expensive raw materials and how rapidly finished product accumulates during an 8-hour shift. It makes sense that they are using the smaller cellphone cells with about 1/4 the raw material. The company has consistently stated that line 1 has run well the last 2 weeks and that they expect regular (1 8-hr shift) production by the end of the month.
The question of what are they going to do with all this product has been raised before. Would it be logical to perhaps go a little slowly with the qualification run if an order is pending, based on OEM testing of line 1 samples that may already be in progress? The qualification run could therefore be completed with product already spoken for!
Another possibility is that qualification is already complete and there is no hurry to announce it. It would fit quite nicely regardless, in the annual report due at the end of the month.
Still another possibility is that, in spite of their having repeatedly stated that line 1 has been running well, there are insurmountable problems and that they are not being straight with their major shareholders. I personally find this highly unlikely, and favor some combination of the other two or another, much more positive scenario.
Again, there have been no official announcements and we have had to work with pieces of information we were able to extract.
I will close with a reminder that VLNC staff includes Seagate's first CEO and a Director of Operations who worked together at Seagate during it's first 7 years. Other top professionals have migrated to Valence from leading companies. When you speak with any of them, you will probably sense, as I have, that they are pleased with their situations and the company's future.
Best Regards, FMK |
