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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Tickertype who wrote (1738)	12/13/1997 2:04:00 PM
From: mooter775	Read Replies (2) of 27311

I was led to believe in earlier discussions with credible sources that the "start at 50% capacity" is indeed and has been the company's fallback position as of mid-February. I believe that I posted this in the past two weeks. The tweaking with the lines is to get at least 2 lines to be capable of producing at the 75%-80% capacity rates, which would allow contracts not with just one of the four or so customers with whom the company has been working over the past 3-4 years, but 3 or 4 of them. If the company believes that progress is continuous, then they will push the time frame closer to Q1 before they announce any contracts. I still believe that is the case. What I am confused about is the actual state of the equipment for lines 2 and 3 (which I am led to believe have been tested for short periods of time satisfactorily at the 'normal' production rates of 75%-80% maximum capacity), line 1 (which I understand is being reassembled for Q1 laptop cell production), the coating machine (which I understand has recently been installed in Ireland and functioning properly() and the laminating machine (which I had inferred was completely installed, but I now understand may have had a several week delay from sometime in mid-November to mid-December but in management's opinion will be successfully installed and run by late January.) As a result it does not seem unreasonable that 'hcirteg''s posting of full pilot line testing of line 2 next week will in fact occur. It also does not seem unreasonable that the company can in fact get (or have) the remaining laminating equipment installed within 1-3 weeks. And it does not seem unreasonable that the company could announce some kind of contract or production schedule in mid-to-late January with production in February/March. If one is more cautious and wants to wait for a contract or production announcement, then that's fine, and you'll avoid the near term uncertainty and risk in favor of buying later at what will probably be a higher price. If not, then you'll hang in there for several more weeks, as I intend to do, with some remaining faith in the management and the production schedule.

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