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

To: Larry Brubaker who wrote (16255)	11/18/1999 1:21:00 AM
From: I. N. Vester	Respond to of 27311

What % of earnings do Intel and Cisco put into R&D? ditto for advertising (you think TV ads are free?) ditto for sales forces What are their tax rates? What are your estimates of the same for Valence?

To: Larry Brubaker who wrote (16255)	11/18/1999 1:24:00 AM
From: Mark Johnson	Respond to of 27311

Larry have you noticed you missed an almost 80% gain in price of Valence shares in the last two months?

To: Larry Brubaker who wrote (16255)	11/18/1999 1:35:00 AM
From: Mark Johnson	Respond to of 27311

Larry, here's where IN said it best....hit the nail on the head....and you missed a tremendous buying opportunity: <<But in the last 2 months while you have continued to warn how dangerous CC was, the longs understood their actions far better than you did - well enough to profit big time by getting in at the bottom.>>> And this past year you have been predicting, death spiral, bankruptcy etc..etc...

To: Larry Brubaker who wrote (16255)	11/19/1999 6:38:00 PM
From: mooter775	Respond to of 27311

Larry,. I'm not going to get into a pissing contest with you on expected margins or run rates, ok? My opinion is that the company will have in place equipment in late 2000 to achieve a run rate of $ 250 mm in 2001. In fact, I believe that equipment has already been ordered several weeks ago, along with a similar order by Hanil. I am comfortable in expecting a > 60% gross manufacturing margin on cells produced in NI and 50% adjusting for yield. GSA should be < 15% (no real sales and marketing costs) and including R&D at 5% of revenue, leaves a pretax margin at 30%-35%. Tax rate (NI and Grand Caymans structure) should be < 20%, probably around 15%, leaving a net after tax of 20%-25% overall, and 30% on the margin. (Your comment re Intel is inappropriate, since I was talking about net margins on incremental revenue after breakeven. And INTC has a larger tax rate than VLNC's expected 15%-20% in the early years.) So I think we will see > $ 1.00/share in 2001, especially if including licensing and jv income. And since I believe that the capacity to do this will be in place in late 2000, and since I believe that the investment community will see VLNC as capacity restrained for the years 2000-2003, then I believe investors will begin in late 2000 to attach very aggressive multiplies to 2001 and 2002 expected earnings. And while I would be the first to say that all of us are guessing a bit about sales prices, yields, gross margins, etc., I am confident that Valence will be seen as the industry market leader and accorded a multiple befitting such leadership. In the shorter term, I think the stock performance will be determined by the size and frequency of repeat orders.