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

To: Mark Johnson who wrote (17927)	1/30/2000 5:17:00 PM
From: Rich Wolf	Respond to of 27311

Hi Mark, Just so you and other longs know, some of us are attempting to arrange a location for gatherings Mon eve and Tues afternoon, before and after the AM. Info will be posted in advance. Regarding your re-post of Fred's numbers, be careful. There was a confusion about cells/batteries which we worked hard to get straight: The assembly machines make 5-6 (max 10) laptop cells per minute (Klochner), and 12-15 (max 25) cellphone cells per minute (Arcotronics). A laptop battery will consist of 3 or 4 of these cells, electrically connected in series. A cellphone may use one or two cells electrically connected in series. Bottom Line #1: the 'watt-hour' outputs quoted in those tables are way too high. Fred was operating with the best info he had at the time, but it would appear to have been incorrect. Further, they had stripped the second Arcotronics line of parts to use to make the Klockner function properly. Don't know if they've ever put the second Arco back together. Note that you can get to that now-infamous $80-100M annual run rate for 300 days/year, 24 hrs/day operation, if you assume half-speed on the Klockner and Arco, and pricing of $4/wh-hr and $2.50/wh-hr, respectively. May not get that laptop pricing initially, but PO number two seems to have given the latter to us, for cellphones. Increase the run rates, and you can maintain these output numbers even at lower pricing. Don't know if they've been able to progressively speed up the assembly machines beyond the half-speed rates quoted above. Hence, until they tell us otherwise, I only use the known rates. However, I would not at all be surprised if they've attained good yields at higher rates over this last year, at least for the Arco. Given the potential for having run the lines faster by now, and maintained yields over 90%, I believe the run rates quoted by the company are potentially quite conservative. Won't mind hearing an upside surprise later this year, eh? On top of all this, do not neglect consideration of the back-end processing equipment bottlenecks. Lev delineated last August just what equipment they needed to put in place to attain their quoted rates. Note that this was mostly redundant copies of equipment they already had, so low-risk to extrapolate the expansion of capacity. Unknown factor, to my mind, was the automated packaging equipment. We know they've received this equipment for now, at least for the small cells. They may have put off the large-cell equipment until they have the laptop POs close at hand (soon?). We'll get much better information in a few weeks. I am quite content with my holdings for the time being, don't you know!! Looking forward to meeting many others at the AM. Regards, Rich

To: Mark Johnson who wrote (17927)	1/30/2000 8:50:00 PM
From: I. N. Vester	Respond to of 27311

mark, i talked with fred today & he plans to come to vegas. he was very pleasantly surprised when i told him i have a big check in his name. he sure can use it, still struggling to deal with debts and keep a few thousand shares of valence. it's a real pity things worked out so badly for him. well he was too hiper agressive and was getting a lot of optimistic projections which he bet too heavily on, and putting everything in options was far too risky and in fact was stupid to put it bluntly. i can't help all that, but i do have to recognize that his knowledge of production capability etc helped to convince me to get so crazy into this and now that i have gained, i really feel like i need to help him. i think he really helped make a lot of people rich, and & he deserves a nice place at the table now!