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

To: Zeev Hed who wrote (14104)	9/1/1999 12:01:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

The math doesn't appear to support your theory. You wrote: " The fact that they get a "10 days look back" conversion price, allows them to short everyday about 30,000 shares. At the recent rate of decline this is less that the increase in coverage their floorless gives them. They have already captured (assuming they shorted 1.25 MM shares above the ceiling) their investment and then some, now everytime they short more, it is pure profits, assuming their covering is below their average additional (above the original 1.25 MM shares). Response: If they have shorted the maximum 35,000 shares a day they are allowed, then since July 27th through August 31st, they shorted 910,000 shares. Using the conversion price as of the close of trading yesterday, they would get an additional 450,000 shares. So if shorting 35,000 shares a day was sufficient to drive the stock down, then for every two shares they shorted, they got one more due to the variable conversion price improvement. They haven't gained 30,000 shares a day, but about 17,000 shares per day over this time frame, although over the last two weeks, they have gained 31,000 shares per day. On July 27th, they could have been already short against much of the tranche, as you imply in your post. They had plenty of opportunity to short at a price of 7 or higher in the last six months, about a buck above their conversion price. Right now if they are shorting, they must be doing it about a buck below their "locked-in" conversion price. Say they were short half the tranche before July 27, then by now they would have shorted almost 1.55 million shares. They get 1.75 million shares from the second tranche based on yesterday's conversion price, so by now they would have only 200,000 shares left to short. As long as the stock doesn't completely break down and drop too fast, they will eventually run out of shares. The spiral is the case of a "diminishing spiral". But of course what if CC is truthful when they say they aren't selling Valence stock now? They may allow the selling coalition to take the stock down, convert as soon as its apparent the conversion price has bottomed, and make a killing when the stock returns to the 7 price level it was at in early July. This is when they make really big bucks. And this will be when the selling coalition will be scrambling for shares. Paul

To: Zeev Hed who wrote (14104)	9/1/1999 1:12:00 PM
From: Cathi Wierzbicki	Read Replies (1) \| Respond to of 27311

Hi Zeev: Still see the 3+ area as the bottom here? I found Paul's info from the CFO that VLNC had made CC an offer to "surrender" their variable debenture interesting. Suggests to me that VLNC is concerned about CC's intentions; which, of course, is not surprising. Also interesting that Berg stepped in at this time to sop up some of the overhang. Hope that effort is ongoing...:-) What signs are you watching to discern the bottom here? Thanks. Cathi