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

To: David Penfield who wrote (13332)	7/23/1999 12:39:00 PM
From: Rich Wolf	Read Replies (1) \| Respond to of 27311

David, this is not a 'normal' floorless convertible. Many financing deals have such trap doors in them, never intended to be used unless everything goes to hell in a handbasket. When I first investigated CC last year, I recall seeing deals that Castle Creek did with other companies where they had written in such clauses, but never invoked them. The grades of financing span a continuum, and for companies such as Valence circa July 1998, there was both risk AND high reward. It is not surprising that until they got past certain hurdles, they needed to finance with a hedge fund rather than a larger institution. But to posit that CC are at the end of the continuum (floorless bandits)rather than what they are (a lower tier firm willing to speculate in high risk/reward investments) is misleading. I believe that the recent $3M investment was from a higher-tier institution, that we'll see more of that soon, and maybe we'll hear the name. That would put much of this speculation to rest.