Ticker and All: I pulled this from AOL and present it here for your consideration:
Subject: Re: Production
Date: Thu, Dec 25, 1997 14:06 EST
From: Funcprod
Message-id: <19971225190600.OAA22455@ladder01.news.aol.com>
To All:
1. There has been discussion, from time to time, about the issuance of additional stock to fund additional production lines. I have spoken with David Archebald about this and he acknowledged that, based on his financial models, future production lines can be funded from cash flow. This depends greatly on when the cash starts flowing and how fast. He has investigated alternatives as fall-back positions -- including asset-based financing such as
equipment or facility leaseback arrangements -- the GE Capital type of thing. This is probably one of the cheapest forms of financing since the leasing company takes on minimal risk and offers favorable interest rates in return. STOP THE HAND-WRETCHING about financing future growth ! ! There should be no need to issue new stock to fund it, so your shares shouldn't get diluted ! !
2. There has been talk lately about --- dare I say the word? --- a buyout. From another battery maker's point of view, acquiring Valance could be a cheap way of buying into this profitable market. With a current market capitalization of only $115 million or so, a buyer could offer a 100% premium ($230 mil) and buy plant, production capacity, and cutting edge technology (including patents and license agreements). This would be a steal for them
and a great disappointment for us (of course, because we're looking for much greater stock appreciation !). Don't think that this hasn't occurred to the likes of EverReady. I think Valency already has a relationship with EverReady -- a cross-licensing agreement if I'm not mistaken. So Valence is probably on their radar screen already.
3. Regarding the recent departure of Mr. Masuda, one astute contact of mine suggested that his technical skills became "redundant" when Valence brought in the technical wiz-kid from Gould, Dr. Kalnoki-Kis. (was Masuda's major contribution his technical skills?? Not sure ....). I think he may have been too aligned with Cal Reed. I read Mr. Masuda's departure as a no-big-deal event. Too bad the rest of the market didn't do the same. Oh well ...
4. By the way, I spoke with David Archebald about investor relations, etc. He said that until the end of the year, Cal Reed is still officially the CEO and the don't plan on doing things differently (from how things have been done). However, after December 31st, they may very well handle things differently. I took this to mean that they might be more forthcoming in their official announcements/public statements. We all look forward to this!
5. David mentioned that they do not have any orders in-house at this time (as of about 10 days ago). They will not accept any orders until the customers have seen product that was produced from the NI lamination line and assembly line. (i.e., no orders will be accepted based on lab samples.) David expects that they'll be cranking up the lines shortly after the 1st of the year. He said that an order would be considered a material event that would
result in an official announcement.
Very long on VLNC and looking forward to a great `98 ! ! !
Tackman
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Now given the past couple of years charts, and barring any ADDITIONAL unexpected news, the next few trading days should be very interesting!
Regards!
John~ |
