VALENCE TECHNOLOGY (VLNC) Message Board

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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: Emmo who wrote (2338)	3/2/1998 10:23:00 AM
From: FMK	Read Replies (2) of 27311

Emmo, Here's a question for you. ULBI recently raised capital by increasing their float by 2.5 million shares. With the increased float, ULBI has 8.9 + 2.5 = 11.4 million shares outstanding while Valence has about 23.7 million. From Conf calls and conversations with the company, it is known that Valence's high speed Italian lines have twice the capacity as their line 1. Valence's first 3 lines therefore have 5 times the capacity of Valence's line 1 and therefore 5 times the capacity of ULBI's solid polymer line from the same mfr as Valence's line 1. About six weeks ago, I compared capacity calculations with the analyst whose firm brought ULBI public. The results supported this conclusion. As of 1 month ago, I was told ULBI did not have an additional line on order. Adjusting to a per share basis, Valence's automated production assembly equipment appears to have 5 x 11.4/23.7 = 2.4 times the capability of ULBI's single line. If you can project profits according to automated production capability, doesn't it make more sense to purchase , for example, 2400 watt hr of production at $5.50(VLNC share price) than 1000 watt hr at $15 (ULBI share price)? We know that ULBI went from about $9/sh to $20/sh when they announced Li-polymer contracts. They were months away from delivery of their automated production line so they have been building Li-olymer batteries by hand and their stock has recently held at about $15, even after the dilution. If ULBI ran to $20/sh and Valence automated equipment has 2.4 times the solid polymer production capability per share, what do you expect to happen to VLNC share price when Valence announces Li-polymer contracts?

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