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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: FMK who wrote (9257)3/13/1999 5:35:00 PM
From: Larry Brubaker  Read Replies (2) of 27311
 
<<Larry, do you think Castle Creek would have become involved if their factory visit and due diligence indicated that Valence was likely to fail?>>

FMK, given the way the deal is structured, there is no reason for them not to become involved. They can earn big bucks if the price goes up, and they can earn big bucks if the price goes down.

These deals are structured this way in circumstances where the investment is otherwise a huge risk and nobody is willing to buy shares at a fixed price.

Thats why I keep saying I am anxious to see what VLNC comes up with on their next financing. If they can convince somebody to make a substantial investment at a fixed price (even if at a modest discount to the market price) I will be much more convinced that they are, in fact, close to selling a product.
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