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

To: mooter775 who wrote (13269)	7/21/1999 9:30:00 PM
From: Robert Cohen	Respond to of 27311

Mooter, If CC has converted, wouldn't that be reportable? Robert

To: mooter775 who wrote (13269)	7/21/1999 9:51:00 PM
From: Pallisard	Respond to of 27311

Rich and Mooter, great posts. That clears up a few mis-conceptions I had about this issue and puts a bright light on the rest of it. Thanks

To: mooter775 who wrote (13269)	7/21/1999 9:55:00 PM
From: Larry Brubaker	Read Replies (3) \| Respond to of 27311

Mooter, actually, there are several errors in Rich's analysis. First, Castle Creek has probably done the majority of their shorting at prices anywhere from $7.5 to $11. Let's assume the average is $8.5. Compare $8.5 to the $5.875 adjusted ceiling, and they have earned a minmum of 45% (not the 10% - 20% mentioned by Rich) on their $15 million. Not bad for a year for a nearly risk free investment. Second, assuming they have shorted the majority (if not all) of their $15 million, they have their money (plus their 45% profit) off the table but still earn 9% on their preferred shares, (without having any money at risk). There is no point in them converting the preferred shares unless the price falls so low that they would want to lock in a big floorless gain. Third, their profit increases if the conversion takes place below $5.875. Fourth, in the event the price takes off, they can also earn profit in addition to the certain 45% + 9% by purchasing the 100,000s of thousands of warrants they have. Should the price go to $20, this would amount to millions of additional profits. Or they can earn more if the price falls further via a variable conversion at lower prices. You guys are arguing that they are giving up a certain 45% profit + 9%/yr profit + additional potential profit either way (through a floorless conversion at lower prices, or through a warrant exercise at higher prices) in favor of an unknown and risky bird in the bush. I don't buy it.

To: mooter775 who wrote (13269)	7/22/1999 3:03:00 AM
From: Rich Wolf	Read Replies (1) \| Respond to of 27311

Mooter, I agree. And once we pass the 'magical' July 27 date, and days and days and days go by without a conversion taking place, people will realize that Castle Creek IS really in it for the long haul. My WAG: we then see another financing at a fixed rate from the same institution as last month ... who may also be providing the floor to the shareprice right now as they add to their position on the open market. This ought to give confidence to the marketplace, and rightly so. We also are due for updates on the status of Hanil before the next conference call (mid-August?), and shipments to Hanil, Alliant, and possibly others. Expecting to hear soon who the winner of the Energizer Power Systems (EPS) auction is, since their most marketable product will arguably be the Valence battery. Long and bullish.