Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: kolo55 who wrote (14326)	9/6/1999 1:06:00 AM
From: Pallisard	Read Replies (1) \| Respond to of 27311

Larry doesn't respond directly to issues, if it doesn't agree with his agenda or further his opportunities to produce negative points of view. He also doesn't talk to management because he knows their statements will disagree with his agenda. He's not really interested in the truth, he's interested in making statements that will convince others that Valence is failing and possibly to sell their some or all of their position. Any logical scenario you present him that supports Valence will be met either with silence or a re-interpreted, negative, usually irrelevant distortion. I applaud your analyses and your very significant efforts in producing them. Thanks

To: kolo55 who wrote (14326)	9/6/1999 1:11:00 AM
From: Larry Brubaker	Respond to of 27311

Paul, no I'm not saying you are wrong now because you were wrong before. You might very well be right. But I do think it is a mistake to make definitive statements about who is doing what that, unless you have a bug planted in Castle Creek's office, you can only guess about. That was my point. You have been wrong when making definitive statements in the past, and you might be wrong with your latest. Some comments on your points. <<There is some material that I believe is clearly wrong and needs to be corrected. My posts from March, fall into this category. I felt that you and Zeev were incorrectly interpreting the SEC filings, when you claimed CC had already converted preferred shares and were selling the shares acquired on the open market. This was incorrect, and needed to be corrected, IMO.>> Once again, as I said several times in March, not only did I not claim Castle Creek was shorting and converting preferred shares, I specifically said several times that it was in Castle Creek's best interest (presuming they were shorting) not to convert their preferred shares. So you were correcting a straw man. <<But why can't I post an analysis if it seems reasonable to me, and isn't being discussed much on the thread?>> Who says you can't? I'd much rather discuss a reasonable analysis than respond to insults from johnson and sharp. My criticism was about the definitive statements you made. They may turn out to be right, but they may not. If you couched your analysis as your opinion or an educated guess, when it is an opinion or an educated guess, I would not criticize. Most likely argue, but not criticize:-) <<That the rate of decline has been insufficient to allow CC to replace the shares that it has taken to drive the stock to this level, IF CC SHORTED at all during this decline since July 27. Through the third week of August, they denied they have been selling in their discussions with Valence management.>> Maybe, maybe not. As I've suggested before, Castle Creek (assuming they were shorting) could have been both shorting and covering on the same day. In which case, the amount of net new shorts may be more than made up by the additional shares gained in the conversion price. And if they were not shorting as has been reported, then they certainly gained more shares than it cost them from shorting. Another possibility is that Daddy Warbucks is shorting in the implementation of a leaky floorless. <<That deep pocket investors (possibly insiders?) appear to be supporting the stock strongly below 4 1/2 (four consecutive closes of 4 3/8, followed by two up days).>> Yes, quite possible. However, it is also possible that the same people who are shorting are taking the opportunity to cover at low prices, let the price rise with the current "buying opportunity," only to begin their assault again at higher prices. <<To prevent the conversion price from climbing, the sellers must push the price down below 4.35 by NEXT FRIDAY, through the resistance that the stock has now bounced off twice... the first time was on August 18.>> True. Assuming, there is nothing to Zeev's "landmine" theory. Also, if the support in the low $4s came from the same people who took it down there to begin with, it may be only illusory support. We'll see what happens. My own opinion is that the stock is in the hands of the big boys. What they will do with it, I really don't know. My safest prediction is that if the stock goes up next week, this thread will crow about the demise of the death spiral "hoax". But I will wait to see some solid purchase orders before I am ready to agree to the demise of the death spiral. Or better yet, break even cash flow. Which according to several of your fellow bulls, is supposed to happen this quarter. Do you think VLNC will break even on cash flow this quarter?

To: kolo55 who wrote (14326)	9/6/1999 10:26:00 AM
From: Zeev Hed	Respond to of 27311

Paul, where I think that there might be an error in your analysis of last week's trading is in the assumption that CC's views the current price range as "now or never", or as the last opportunity to convert at a beneficial price. In other floorless situations, we always have intermittent rallies (some spirited like AND in the last week), which are often meeting with heavy selling at 20% to 50% gain (often depends on the issue's price, in very cheap stock, I have seen these intermittent rallies go to a 100% gain just to fall apart within days). In most floorless situations, the bandits do not convert to hold the stock, they often convert to deliver the stock against their short. They make their money by shorting well above the ceiling, thus recovering all their investment and then some, getting paid interest without having capital at risk (in essence an infinite interest rate) and move that capital to another situation. If the stock drops under the ceiling, they may continue and increase their short position, until they learn (and they will learn before us) of a change in the company's prospects to the better. We saw that pattern in ZCAD (now GATE) in which the price of the stock went down from about $6 to $.5 (pre 10 for 1 reverse split) over a long period, and then the end game was signaled by extremely high volume at the bottom over a number of days. The stock then went all the way to $3 after the end game (a nice 600% for those lucky to buy at the bottom and sell at the top). In that declining process, the stock had many rallies of 30% or more, causing the then conversion rate of the floorless to temporarily increase, but that did not change the overall trend. Then a new floorless was instituted by Idanta, and the stock went all the way to $.25 before it recovered . I'll tell you that the threaders at GATE had nothing but kind words for Idanta, benevolent investment, at the beginning, and then it turned to furry and then some, when to protect their investment they did what any investor would do, protect it. Unless your assumption that September is indeed the month in which VLNC is going to demonstrate a major changes in its outlook, there is no urgency, IMHO, for CC (assuming they are playing the normal bandits game) to convert, it might be more beneficial for them to actually cover a little here in the low $4 (and induce one of those minirallies) and then reestablish a larger short at around $5 to $5.25, which IMHO, is now the major overhead resistance. This discussion does not take into account the last $9 MM in equity, for which I have no explanation. If we assume these are more than one investor, it could very well be that the new CFO has managed to charm few institutions and persuaded them that the future is great (after all, the guy would not have joined VLNC if he did not believe in that story). It all boils down to John's mantra, how about those OEM's PO? I would say that the technical break under $5.25 is an indication that those PO's might not be as imminent as many think they are. Zeev