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

To: kolo55 who wrote (14676)	9/20/1999 1:50:00 AM
From: Larry Brubaker	Respond to of 27311

Paul, I think it is quite possible the "selling coalition" as you call it is Castle Creek and Daddy Warbucks. Castle Creek for obvious reasons and possibly Daddy Warbucks because he had an agreement to purchase each monthly $3 million financing at a discount to the market price when the financing is issued. The latter is also a form of a floorless which Zeev calls a leaky floorless. In a leaky floorless, the purchaser uses the shares acquired from each new financing (at continually lower prices) to cover shorting done at higher prices. E.g., Daddy Warbucks shorts shares in the $7 to $8 range, uses the shares purchased at $6 to cover, then shorts at $6.50 and below and uses the shares purchased at $5 to cover, then shorts at $5.50 and below and uses the shares purchased at $4 to cover. VLNC is once again approaching their next round at the monthly financing trough. If the leaky floorless theory is correct, and still intact, we may see another round by the selling coalition coming up. Between the monthly dilution of the stock and the favorable conversions by Castle Creek, VLNC needs to generate some real sales soon or the dilution is going to start adding up. 700,000 shares here and 700,000 shares there and pretty soon we are looking at a whole lot a shares.

To: kolo55 who wrote (14676)	9/20/1999 2:03:00 AM
From: Harold Hertzfeld	Respond to of 27311

Paul, Thank you very much for your response. It is a brilliant explanation of the market price behavior of the Valence stock for the last several months. Harold

To: kolo55 who wrote (14676)	9/20/1999 9:47:00 AM
From: Mark Johnson	Respond to of 27311

Thanks Paul your recent posts have been "brilliant".

To: kolo55 who wrote (14676)	9/20/1999 10:23:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

Paul, I think that you might be quite correct with your analysis of shorters hovering over floorless situations, whether or not the bandits themselves short against their block. In the case of VLNC most of these shorts are in "positive territory and probably will be so at least up the the $6.5 to $7 area (very rough guess). When the stock gets down to the $4 area, they may be covering and they may be reinstituting those shorts (all within the reporting period for the short) and then some in the $5.5 to $6 area (thus causing the overhead resistance we saw there). Unless and until VLNC produces a material event, they'll probably continue and "do the range, until the support in the mid $4 collapses (if it does), then they move the range down another notch. Right now is is a minor support in the low $5, but the major support is still in the low $4. I'll join John in saying, where are those "friggin" PO. That may change the picture enough to get VLNC out of its current down trend. Zeev