My undertstanding is that the VLNC cells from its line 1 began showing deterioration around 20 days into testing and continued to deteriorate until 40-50 days, when the company became convinced that the line 1 production process needed modification. I think that the deterioration came from around the edges of the cells and was caused by imperfections in the cutting process. There was no shorting out and burning through the battery membrane, I believe. VLNC has since attempted to correct this by,among other things, heating the plastic laminate prior to cutting. (Parenthetically, the smaller degree of cutting required in laptop batteries, since they are bigger than the cellphone batteries, may alleviate the problems) Anyway, my understanding is that line 2 never experienced these cutting/lamination/deterioratiions problems that line 1 experienced, and have indeed already the 40-50 day "deterioration period" experienced by line 1. But it was these problems that caused me to post cautionary notices about 8 weeks ago (and lighten up my position in VLNC, which I have since reversed and am fully invested).
As for ULBI, they have been supplying HP and Mitsubishi with 8"x10" laptop batteries (which VLNC cannot do yet, admittedly due to their inherent volatility in the 8"x10" format, accoring to a member of senior
management) on either a semi-automatic or "by hand/lab based process" according to whom you talk. Regardless I have always felt, as has VLNC management, that the key is producing qualified batteries on a fully-automated basis, not supplying 'high-name' customers with small amounts of product.
I shorted ULBI stock, and lost nearly $ 50 k when I covered as ULBI ran up to $ 20 based on the HP deal. But I remain convinced that ULBI is nowhere near real production capability,(since they are indeed relying upon the same line 1 vendor that VLNC used) and that VLNC is very close to a real breakthrough. I continue to think based upon information that I've received, that the ocmpany will announce OEM contracts by 12/31 and the stock will perform very very well over the coming months. |
