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

To: Zeev Hed who wrote (14481)	9/10/1999 1:35:00 PM
From: kolo55	Read Replies (2) \| Respond to of 27311

I'm not sure I understand you. You wrote: "You may have to restart your "count down" again. I don't think I need to start a countdown soon; we are in the period when the conversion price will apparently climb (barring a complete reversal of the last ten days trading overnight). The lowest six days in the conversion period are at the back end of the ten day period. If the selling coalition started another drive to push the stock down, how long would it take to get the price down to a level where they need to establish six closes lower than the existing conversion price? In the period Jul27 to Sep1 (the bottom), the stock dropped about 7 cents a day. If the stock went down as fast as previously (a critical assumption that I will discuss in a moment), it would take over 12 trading days to get the closing bid to 4 3/8. Then they would need to push down for another six days at closes below that, in order to lower the conversion price slightly. To get a 10% improvement in conversion price, will take a selling period of over 22 trading days, unless they hit a lot harder than they hit the stock last time. This means the next time we bottom would be sometime the week of October 11-15. Now to the assumption- How easy will it be for the selling coalition to push the price down (if they try it again)? You seem to feel that they will be stronger on the next round... I disagree. I think in the next round they will be much weaker. The selling coalition has already sold a lot of shares, and they will be running out of firepower. The naked shorts will be more likely to look to cover and lock in profits on the next push down, if it comes. This thing can't go on forever, unless they are convinced the company will fail outright. And this is a key issue... as this thing drags on, the possibility of a PO announcement increases. In your other death spirals that you quote, could you point me to a death spiral that happened in spite of improvements in the company's fundamental business? I understand Valence management had said that they hope to breakeven on cashflow in the DecQ... this should mean a PO announcement relatively soon, and I think we all agree that this would end the death spiral concern. The mere fact that this is more likely to happen in October than it was in August, should make the naked short strategy more risky. Finally, there are a lot of bulls who will buy this next dip. They have been reviewing the fundamentals, and will jump on the next dip. The last two drops to about 4 1/4, on August 19th, and the period Aug27 to Sep1, were stopped with major buying at this level. The selling coalition will have a hard time penetrating that level, if they try, and they need to penetrate that level to lower the conversion price significantly and keep their death spiral hopes alive. If CC doesn't convert now, I suspect the selling coalition won't make another assault for some time, unless the company reports some disappointing news. JMO of course. Paul