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

To: Larry Brubaker who wrote (13853)	8/19/1999 9:15:00 PM
From: Zeev Hed	Respond to of 27311

Larry, assume that CC does indeed go into the spiral thing, then they have two situations, either they are at the max of 30,000, thus their maximum exposure is no more than 300,000 and then only a small part of that would be at the max low, the majority would be above the look back price (the lowest of the last 10 days). If they short the full 15% (it has to be the monthly average volume, which will increase over time if we continue at todays pace, but so far yields not much more than the same 30,000 shares), you can adjust the same. As the price goes down (in a true spiral) the volume goes up (and even higher on intermittent rallies) allowing for deeper and deeper shorting, but in essence most of the short position would typically well above the absolute low of the period. More likely, because the price went down too fast, in CC's shoes, I would support the price and get a rally started (by covering some) like this afternoon, so I can resume shorting at somewhat more beneficial prices. I have a lot of respect for CC and believe they are quite smart and they do not need my advice as to how to manage their position, but when the stock hit $4, I would have opened the covering gates, and then started shorting again in the $5.125 to $5.5 range. Zeev