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

To: Rich Wolf who wrote (15033)	10/5/1999 2:10:00 AM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

Of course there is evidence to support my theory, Rich. That evidence is the fact that the short increase DID NOT increase last month. Even after Paul, who has been watching Level II on a daily basis, predicted the short interest to increase by 500,000 shares. Paul who now claims to know who is buying and selling every share was completely mistaken once again. It was only when I predicted that the short interest would NOT increase that you came up with YOUR wild theory that Castle Creek was selling real shares, not shorting. There is no evidence whatsoever to support your theory, while the lack of increase in the short position does support my theory that Castle Creek merely reloaded the gun in the low $4s. Further evidence to support my theory is the fact that Castle Creek only converted 40% of their preferred shares. Now why wouldn't they have converted all of their Series B preferred shares at $4.43 if the deep pockets have been so successfully "stripping them of shares" as you and Paul claim? The only answer I can come up with is they think they will get a lower price than $4.43.

To: Rich Wolf who wrote (15033)	10/5/1999 2:36:00 AM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

One other major flaw in your wild theory that Castle Creek was selling shares they had acquired to box their shorts, Rich. The trading range of the stock all spring was between $6.5 and $8.5. We both now agree that Castle Creek was probably responsible for supporting the stock at $6.5 and resisting at $8.5. Although I had been suggesting this all spring, and it was not until the last month or so that you came to agree with me. Where we diverge is how they supported the stock. I think they covered some of their shorts at $6.5, while shorting more at $8, therefore, the steady increase in the short position. You think they boxed their shorts at $6.5, and used these shares they acquired to drive the price lower after the variable conversion took effect at the end of July. The problem with your theory, Rich, is that Castle Creek would have had to sell these shares at a substantial loss in order for your theory to be correct. They would have purchased the shares at no less than $6.5 and would have sold them at as low as $4.25 or so. I think Castle Creek is smarter than that.