VALENCE TECHNOLOGY (VLNC) Message Board

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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: P. Ramamoorthy who wrote (7648)	1/28/1999 9:38:00 PM
From: Larry Brubaker	Read Replies (3) of 27311

<<ULBI's management change is indicative of the intense competition, challenges in commercial production, and cash starvation...VLNC has 133Million in losses and was cash starved until recently>> Mr. Ramamoorthy, compared to VLNC, ULBI is a cash cow. ULBI had working capital of approximately $38 million as of the end of the 3rd quarter. VLNC had working capital of negative $2.5 million. ULBI's cash burn rate is about $1 million per quarter, VLNC's is about $6 million per quarter. VLNC received $7.5 million in additional funding at the end of the 4th quarter. However, given that they probably burned $6 million during the 4th quarter, VLNC probably began 1999 with working capital of about negative $1 million (-$2.5 million -$6 million + $7.5 million). Whereas ULBI probably began 1999 with positive working capital of about $37 million. So your suggestion that ULBI is cash-starved while VLNC is not is incorrect. While neither company has the capital resources to compete with the Japanese, at least ULBI does not have to try to juggle its creditors while trying to avoid a floorless conversion of convertible shares.

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