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

To: Larry Brubaker who wrote (13986)	8/26/1999 9:43:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

Wrong. "Today's closing bid price was the second lowest of the last 10." Check your facts. Today's closing bid was the lowest of the last ten but, it will not be the lowest over the next ten.

To: Larry Brubaker who wrote (13986)	9/1/1999 1:11:00 AM
From: kolo55	Respond to of 27311

Responding to your question: You asked: Paul, it seems that you are now acknowledging that Castle Creek is likely to be shorting the stock (despite FRB's claims to the contrary). I guess you've changed your mind from a few months ago when you adamantly claimed that they would have to report any changes in beneficial ownership to the SEC? My response: If I remember correctly, we left the issue of disclosure with the conclusion: That if Castle Creek was aggressive, they might take advantage of the clause on the preferred limiting conversion to 4.9% of the outstanding shares. They could claim that their beneficial ownership is less than 4.9%, and therefore avoid SEC disclosure requirements on large stockholders that own more than 5% of the stock. Personally I felt that this gambit wouldn't pass close SEC scrutiny. But given the ramp up in short position, and the waiver of the variable conversion option on the first tranche, I suspect that CC has at least hedged the initial tranche through short sales. I still believe that the non-disclosure of such a significant position runs counter to the intention of the SEC regs, and I wish the company would suggest the SEC look into the matter… but its unlikely that such an inquiry would occur soon. This gets us to the real question implicit in your post: Where is the selling coming from? You wrote: Second, you point out that any shorting by Castle Creek is not necessarily without risk, as has been the case since the price went below the conversion ceiling. Did you consider that if Castle Creek is willing to take the risk of shorting below the conversion ceiling, what that says about their opinion of the direction of the price? Also, your scenario about a possible abatement of the supposed short attack is not playing out. Today's closing bid price was the second lowest of the last 10. As long as the price keeps falling, there is no reason for Castle Creek to let up (assuming they are at least partially responsible for the pressure on the stock). My response:In the next post, I cover my thoughts and opinions on this, because I don't think this has really been spelled out well. Readers of the thread- have mercy on my soul and pray for me, because I am sure to upset the bears with the next post. Paul