I doubt we hear contract announcement- its too soon.
You wrote:If a contract is not announced this week, if the cc is another let down, the share price likely will depress further as it continues to search for a bottom (as low as 4 5/8 last week?).
Please scan my previous post on timing of announcements (#3238):
Message 5075615
The OEMs almost certainly need 90 days of testing on the newest higher performance models before issuing purchasing orders. Conservative OEMS would test for 500 cycles (charge/discharge) and since there are about 3 cycles a day, this implies 166 days of testing. However, if previous models tested well and were accepted (as management has indicated in the conference call), then testing for 90 days and comparing with previous test curves should be enough to place a purchase order. Remember also that Valence will quarantine new battery cells for 30 days, and retest prior to shipping.
Valence will get better pricing on higher performance specs, so there is an incentive to let customers complete their testing before negotiating pricing. Since the samples were distributed to customers in the May 15 to early July timeframe, the earliest we could expect contracts would be mid to late August, and more likely in September, with more customers coming on in October/November. Therefore its not very likely we hear of a contract announcement in this weeks conference call.
Lev said September volume shipping is a "reasonable guess", "But it depends on the customers." Valence will need to be producing some batteries in NI in volume before the end of August, in order to quarantine for 30 days and ship in September.
Therefore, the best we might expect from this conference call, is some further status on the NI startup, and maybe some preliminary comments on the OEM testing results. I don't expect contract announcements. I don't even think Lev will say that NI is running the entire production system continuously yet, since its only about 3 weeks since they should have received the second coater (per the last conference call). But I think there is a very good chance that Valence will be running their NI production line by the end of August, and I stick with my previous forecast of 80-90% probability they can mass produce in September.
These are my opinions, analysis, and forecasts.
Paul |
