Hi Zeev ... VLNC, as you probably know, has a deservedly poor reputation as an investment ... maybe that could be stated more negatively, and still be accurate ... <g>.
My bull case on VLNC ... (a) they are close to having completed the transition from an R&D company to a commercial products company ... (b) their new management team is led by several people from DELL who ran Dell's laptop division/group ... (c) their new Saphion battery technology (http://www.valence.com/saphion.asp) continues to be tested by the major laptop manufacturers and the Japanese - I understand it is looking positive ... (d) in the meantime, Valence introduced their first commercial product not long ago, called the N-Charge Power System using Saphion technology (http://www.valence.com/ncharge.asp) ... (e) I believe that they have many of the leading battery technologists in the world on board and own all of the applicable patents.
On the negative side, during their last quarterly earnings conference call on August 13, Valence announced a technical 'glitch' in both Saphion and N-Charge ... the result, the stock price dropped from 1.31 to .84 on August 14, and closed at .67 yesterday. While management said that they thought they would have a quick solution, the stock got justifiably hammered.
If I can explain the 'glitch' as a non-technical person, the company discovered that the new battery sometimes had serious performance problems (not safety related) if it was stored for lengthy periods without first having been broken-in or if it was left in direct sunlight for lengthy periods. I understand the solution, to be announced shortly, is that Valence will break-in all batteries before storing or shipping them to customers ... as well as warning customers not to leave the product in direct sunlight.
As far as a possibility of being delisted by Nasdaq for being under 1.00, I do no think that will still be a problem in early 2003 when it could become an issue.
That is my personal and non-professional assessment and opinion of VLNC. I own 25,000 shares now.
Ken Wilson |
