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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Robert Cohen who wrote (12571)	6/30/1999 3:23:00 PM
From: Rich Wolf	Respond to of 27311

Castle Creek can short a minimum of 30,000 shares a day, and up to a maximum of 15% of that day's traded volume or 15% of the average of the last 5 consecutive trading days. So, after a busy Th-F-M, the average trading volume is slightly larger now, so they can push it down quickly as soon as volume dries up. From the S-3s: << CC Investments has agreed that on any day it will not sell our common stock on a public trading market in excess of the greatest of (i) 30,000 shares, (ii) 15% of the total number of shares of our common stock sold on the Nasdaq National Market during such trading day, and (iii) 15% of the average daily trading volume on the Nasdaq National Market for the five consecutive trading days immediately preceding such sale, unless such shares are sold at a price in excess of $12.00 per share. >> Thanks for the confirmation about REDI. A friend who watches level II says they've been single-handedly sitting on the ask for most of the last two weeks. Castle Creek may be betting that the PO won't come quite in time, and Valence will have to come to them for another small offering (for which they would once again waive the variable conversion, as they did in December). By controlling the price, they would hope to get more shares for whatever amount they give Valence. CC is a hedge fund; they know they might lose this gambit, but since they still have warrants to purchase 900,000 shares at $6.78 each, if they lose this bet and the stock runs away from them because a PO arrives this month, the warrants let them stay in the game.

To: Robert Cohen who wrote (12571)	6/30/1999 5:49:00 PM
From: mooter775	Respond to of 27311

My guess is that the selling in the past several days, and certainly that below 7 1/4, was from a holder or holders wishing to get out of their position prior to today's close,ie, the quarter. I do not think that short sellers would be shorting at prices much below $ 7 3/8 - $ 7 1/2. And I agree with Rich Wolf that Castle Creek has much more incentive to maintain their current net long position unless they feel the company is tanking. As I've stated earlier, I doubt if they have shorted much at all - but who is to say that even if they have, why won't they cover their short just like anyone else and let their net, larger long position run if the news is good. Why should one assume that they would just deliver their converted shares to cover? We'll see if that makes sense in the next several days, when that end of quarfter pressure is abated. I, for one, am quite curious to see who was the new institutional buyer in the recently announced transaction. Have a feeling that it was a very well-regarded investor - and perhaps one which would stand available for provide similar bite-sized financings until a purchase order is inked. Finally, it is no small sort of amusement to see the verbiage of so many skeptics with no position in the stock - guess that makes them objective???