>VLNC: 1 low speed + 2 high speed = 5X
>ULBI: 1 low speed = 1X
>...Which means the VLNC shareholder gets about 5.9X the projected
>production capability per dollar invested as the ULBI shareholder
>(looking out about 6 months).
First of all, why do you think ULBI has no high-speed line? Maybe you should call them again...
Second, looking out 6 months, we are in agreement - VLNC stock should be WAY up. As long as they actually do ship product, and don't have problems right away with:
1) Customer discovering problems when product put to real-life test by millions of users, a process that ALWAYS finds bugs not found by in-house testing. I am referring to safety & capacity issues.
2) Equipment breaking down or needing extensive tuning when run at high speed for months on end, causing shipment delay, unhappy customers, bad reputation.
3) Inability to manage demand or bring up extra capacity/JV's, selling more than they can make, causing long lead times and bad reputation.
4) Unhappy customers due to poor customer support (modeled after poor investor relations).
It is AFTER the first 6 months that I am worried. The best thing for VLNC investors is that the price ramps evenly with production revenues. This is what I think will happen with ULBI. LITH may be even better, that revenues could run ahead of the stock price because they are so unknown. For VLNC, however, I have a sense that everyone is looking for a fast runup as brokers & newsletters start pitching it to customers. This will cause the price to spike way up, which VLNC (through no fault of their own) cannot live up to. It will look just like the typical IPO, stretched out a little. Just like IOM or NSCP, once you turn the general public into momentum investors, you'd better get out before the top, because the downside will punch through a stop limit order too fast to trigger it.
Someone commented that this thread is the most rational one they read on SI. It is the most frothy, irrational one I read. What I see is large speculative shareholders spurring each other to buy more, keeping up each other's morale as the price plummets through "support levels".
I think I will probably buy a large chunk of VLNC in early February, after I have ridden through the Dec-Jan ramp on some less-speculative stocks that are more likely to ride a general market trend. Then I will get more speculative as opportunity diminishes in the broad market. |
