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

To: Richard M. Jimmink who wrote (13978)	8/26/1999 1:24:00 PM
From: Pallisard	Respond to of 27311

Thanks Paul, very concise and informative.

To: Richard M. Jimmink who wrote (13978)	8/26/1999 2:08:00 PM
From: kolo55	Read Replies (4) \| Respond to of 27311

Now lets play a little mind game. Lets say their was a large holder who was interested in ending this 'floorless' game and minimize trading. How would they do it? The current CC conversion price is 4.82, so CC can short above that price with impunity. So there is no reason to drive the price up to 4 7/8 yet. The lowest price in the ten day period is 4.53, and there is one day at 4.56; the next price is 4.75. Clearly it would make sense to support at 4 5/8 up to 4 3/4, especially near the end of the day. This forces CC and other shorters to short at a low price, that could be less than the eventual conversion price. So for instance, today and tomorrow, this large holder would support at 4 5/8, stop above 4 3/4, and we would see a narrow trading range, without much volume. The holder would be adding days and moving the ten day period forward, and letting time lapse without expending firepower. Then on Monday, and especially on Tuesday, the holder would begin to drive the price up to 5 even, and hold the price at 5 through Friday. The holder would have to be prepared to absorb CC's daily allotment of 35,000 shares, plus some additional shares from the "short coalition" out there. But I would guess 100,000 shares a day would be sufficient. By Friday close, the conversion price would be trending up significantly, and force CC to convert or stop shorting. Even if it wasn't CC shorting, the "short coalition" would begin to fall apart. In fact I suspect the "short coalition" would begin to fall apart as early as Monday, if we get an uptick to 5 then. They wouldn't want to be left holding the bag if CC converted on Tuesday to capture the lowest conversion price. Under this scenario, the lowest conversion price will be on Tuesday. My guess is that a large holder could end this game with at most 500,000 shares purchased at an average price in the high 4s. And after the game is over, the share price could easily rebound to the 6+ level where it was before this game began. They could end the game, and make money too. Well, this is just a mind game... lets see how it plays out. Paul