The average NASDAQ stock is down 50% from its high.
And one of your favorites, CheckFree, is down 65% off its high. You say you are planning on purchasing that stock at slightly less than the current price (on the CheckFree thread).
Does that make you an excited school girl too?
Also I should note that one of the stocks that you believe Wolunchuk should have recommended last fall was Intel. Well Intel is currently down over 15% over the high last September, and at one point dropped about 27% off its high. Earnings are down, margins and market share are down, and competition is heating up. Like Mark Twain, we can predict that stock prices vary, often unpredictably in the short term.
Investing isn't done by looking in the rearview mirror. Investing depends on forecasting future results, and evaluating risks. The last time Valence seemed to be this close to commercialization, was prior to the laminate problem last August/September, and the stock was at 8-10.
Some people seem to imply that the delay has been the fault of managment. There is another possibility, that the delay was due to a technical problem. Furthermore the timing to find a solution to this technical problem, and implementing that solution, was indeterminate. I believe this is the case.
Valence had been planning to purchase laminate, but was unable to find a supplier that could consistently provide acceptable quality. They then had to develop this lamination process inhouse, and acquire, start-up, and troubleshoot this process. This took time. But they have been making good quality laminate in Henderson since May, and we know that they are now making good quality laminate in Northern Ireland (mentioned in the last cc). This shouldn't be too surprising that they can make good laminate in NI, since the machines and process are essentially identical to Henderson. This is a huge milestone they have hit. The other two processes, assembly and packaging, are very similar to the processes at Henderson, I believe, so I think it is just as likely that Valence can successfully operate these processes in NI.
Other companies attempting to make Li-poly batteries are also seeing delay after delay, and missing one forcast after another. I don't see evidence that they have identified and solved the technical problems that delayed Valence.
Valence has clearly lost some credibility with the Street due to repeatedly missing forecasts (see Red Chip "three strikes and out" comments in their last write-up on Valence). However, if these batteries eventually get mass produced successfully in the next 12 months, I think Valence has the best chance. I also think that chance is over 99%.
When they do start producing, the credibility issue will die a rapid death as analysts focus on forecasting sales and earnings. By my estimate, they are very close to successfully mass producing these batteries. Just closing the credibility gap, should push the stock to prior levels.
If the company also announces purchase orders and contracts as well, then we should see new highs. Valence is a very interesting speculative buy here, adjusting risk with potential return.
The question of start-up of mass production, and initial purchase orders, should be settled by the end of September, and could be settled as early as the end of next week. Lets see if your expectations of nothing happening on either front during this time frame, proves out.
Paul
PS Late posting is due to great evening of jazz at Yoshi's. |
