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

To: I. N. Vester who wrote (14548)	9/13/1999 6:21:00 PM
From: MGV	Respond to of 27311

If they do not convert or otherwise make a deal with VLNC in the next several days, it suggests they think VLNC can go lower, significantly lower. You better hope for news of one or the other. ; )

To: I. N. Vester who wrote (14548)	9/13/1999 6:30:00 PM
From: kolo55	Read Replies (3) \| Respond to of 27311

Seems CC would convert. Based on the information we have, it would seem to be in CC's favor to convert. If they did, the stock would immediately rebound, once the news is out. Some have argued that CC wants the downside protection. I don't get this. If the stock rebounded to 7-8 range, they could likely buy puts at the 5 strike price for a half a buck apiece. By converting, they lock in a 4.45 price, which improves their position, they can sell into the short covering rally, and buy puts on any unhedged position. They can lock a nice profit up easy. If CC is a long term bull, then they almost certainly would convert as well to capture the low share basis. If CC was playing the death spiral big time, and is short over a million shares against the second tranche, then they would convert to cover their shorts. The only case I can come up with where they don't convert, is that they have only shorted a few hundred thousand shares against the second tranche, and would like to try another death spiral attack. But even in this case, CC would be aware there is a huge naked short position. The CC short position against the first tranche is about 1.3 million, plus a few hundred thousand against the second tranche, probably leaves about a million naked shorts out there. In the next attack, these shorts will cover at some point, and CC will run into likely insider buying in the low 4s. Instead an expensive share stripping death spiral attack, they could convert and play the rebound on short covering. It simply isn't logical to infer that CC would pass on the conversion, in favor of another death spiral attack. Of course, a likely outcome is that CC and Valence have reached an agreement in principle to end the variable conversion. This would explain the lack of volume for the last three days. Paul

To: I. N. Vester who wrote (14548)	9/13/1999 6:51:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

One more thing- the sellers have disappeared. We haven't seen a concerted seller attack since September 1st. That evening I moved my SI post to Yahoo, talking about the death spiral attack and the selling coalition. The next day we rallied, and have been trending mostly up since then... Here is the first post in the five Yahoo posts it took to cover the message: messages.yahoo.com One other thing curious about September 1st (the day the closing bid bottomed)... That day there were quite a number of large blocks dropped, especially by one market maker (CC ???). If so, then CC may have violated the agreement with Valence limiting them to 30,000 shares a day, or 15% of the shares traded. I wonder if CC had their hand in the cookie jar? Paul