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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: Zeev Hed who wrote (9838)3/26/1999 8:15:00 PM
From: I. N. Vester  Read Replies (2) of 27311
 
Zeev, you're a smart guy, why are you trying
to give us that 'Altman Z' mumbo jumbo? One
does not have to be a professional VC to
know that it's put up or shut up time for
vlnc and that bankruptcy is one possible
outcome. As far as trying to calculate the
odds of that, your methodology does not hold
water.

Does the 'Altman Z' calculation you pointed to
take IDB financing into consideration? If not,
it is seriously flawed.

The other consideration which is impossible to
quantify is the CBW quotient. This is a
calculation which involves taking Carl Berg's
waistline in cm times the number of shares he
holds times today's market closing price <VBG>.

Seriously Berg is both a physical and financial
heavy weight. He owns 5-6 M shares including some
1 M in trust for his kids or his kid's kids.
Which is currently a $40M-50M stake.

He has very substantial other assets and it is
very doubtful that he would let his vlnc stake
go to vapor without a fight. We have no actual
guarantee of what he will do. He said at the SM
'don't worry about money', but that was off the
record.

You are correct in that this is a risky play with
no guarantee of success. But you are in no position
to judge the risks. You don't know where VLNC is
in their programs with OEM's. The OEMs have had
over 6 months to cycle the batteries over 500 times.
If any serious problems had been found, the stock would
not be enjoying its currently lofty multiple of the
liquidation value of the companies assets.

By the way, how did your friend's "Altman Z"
calculation value Valence's patent portfolio?
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