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

To: golden_tee who wrote (13987)	8/26/1999 9:57:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

Wrong. "CC was hand picked by VLNC's impressive Board of Directors." VLNC clearly, by the terms of the financing, was not negotiating from a position of strength. If the BOD "hand-picked" CC it was a circumstance of pick your poison. Hence the risk of serious dilution, the low amount of total commitment in light of VLNC's strained CF requirements, and the onerous floorless terms. As Forbes magazine pointed out, Berg, himself, is regarded as somewhat of a VC lender of "last resort" in SV. VLNC has been operating on a shoestring B/S for years. The net flow of funds for Berg and Dawson seems - based on the publicly reported sales of VLNC stock by Berg and Dawson over the years - to have moved from VLNC to these two insiders rather than the reverse. This fact, alone, does not mean that VLNC is a fraud company or will fail. Nevertheless, it is a significant issue that is wholly ignored by the VLNC "cult" of fervent supporters on this thread.

To: golden_tee who wrote (13987)	8/26/1999 10:03:00 PM
From: Larry Brubaker	Read Replies (3) \| Respond to of 27311

Robert, I find several things to disagree with in your analysis. First, I find it hard to believe that Castle Creek has not shorted a single share. They are the only ones who could short with no risk (as long as the price was above $6). It is hard for me to believe that there is over $18 million bet on the short side, and none of that is the responsibility of Castle Creek. Second, as far as Castle Creek being "hand picked." Nobody "hand picks" a floorless financing unless they have no other choice. Period. Third, you say, "The fact that the company hasn't tried a "fluff" PR (most companies would have), suggests a level of confidence that should truly have the shorts wondering exactly what Lev knows that they do not." Some might consider "on the cusp of production," and unquantified POs from affiliates to be fluff PR. Fourth, you say, "Notice that they are only borrowing on a month to month basis now because of the current low share price. If they were concerned about their future, they would have gone for the full enchillada in the $7's and raised like $30M all at once." That, of course, assumes somebody was willing to give them $30 million all at once. Even if this was the case, this strategy now appears to be a mistake. The first $3 million was slightly above $6. The second was slightly above $5. At their current burn rate, they will once again need more money very shortly. At a similar discount to the current price, the next financing is likely to be slightly above $4, assuming the price doesn't fall more. So the supposed strategy of minimizing dilution so far has added to the dilution. Finally, as far as the shorts being worried, the evidence does not support this claim. The stock is still under pressure, even at what now appears to be a low price.