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

To: GregFoot who wrote (14854)	9/27/1999 9:30:00 AM
From: John Curtis	Respond to of 27311

Greg: Interesting point! Yes, C.C. has converted a mere 40% of their position at this point in time. I think this goes to the heart of something I believe Rich W. stated earlier, and that is hedgies always keep ALL their options as open as possible. So, allowing for Paul's read of the tape being accurate(and this is one of those times you can point to the true value of Level II access, eh?), then perhaps C.C. is playing their cards against the historical reality of VLNC having failed to deliver more times than not in the past. As a hedgie you'd just HAVE to allow for the probability that it's gonna happen again, because if it does....why....you can probably hammer the equity down through the floor as a consequence. Tactically speaking C.C. has done all they can to insure a goodly profit, given the probabilities at hand, and is now sitting firmly in the "sweet" spot. Either way it goes from here(be VLNC repeat history, or finally come through), they win! Now let's see how this week unfolds.... John~

To: GregFoot who wrote (14854)	9/27/1999 10:03:00 AM
From: kolo55	Read Replies (1) \| Respond to of 27311

Several problems with this theory. You wrote:"If CC converted less than half of their convertible shares, they still have plenty of ammunition left to play with." CC will have to short shares against the preferred shares, then convert later. The availability of short shares is getting tight. Also they have been selling at just above 5. Their current conversion price is still 5.26. They aren't making any money against their conversion price. The buyers aren't stupid; if CC keeps selling, they will lower their bids as the conversion price drops, and they still see CC on the ask. Their goal is to strip CC of shares at a low price, but they want the shares. The longs want the shares at a low cost basis, and the shorts want the shares to cover. Its an interesting balancing act. Right now, CC is still on the ask. They still have some shares left. It will be interesting to see what happens when they run out. Paul

To: GregFoot who wrote (14854)	9/27/1999 2:01:00 PM
From: P. Ramamoorthy	Read Replies (1) \| Respond to of 27311

GregFoot Agree, I wondered the reasons behind the partial conversion. If they could not bring the price down by selling shares in the last two weeks, what could they achieve by partial conversion? Anything better than 20 to 40% return for the year? The price seems to be holding. The company does not seem to hesitate to sell shares at the current market price to meet their "just-in-time" financing needs. The company is able to find investors that are willing to buy these shares worth $2MM, $3MM, etc. every month. Hope the next CC will clarify some of these questions. Ram