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

To: mdf695 who wrote (18955)	4/1/2000 3:26:00 PM
From: Rich Wolf	Read Replies (1) \| Respond to of 27311

Mike, re: Bear Stearns: Once Bear Stearns has hedged (shorted) and/or 'collared' the settlement shares at prices below $30/sh (which is where we saw them begin the selling), there are only two ways I see those shares being back in play at prices over $30/sh: 1) if they boxed some of the short position on the way back up to $30/sh, they would have some more shares to play with; 2) if they exercise the calls just written for the plaintiffs' shares, or assume they will be able to, then they would have those long shares to play with; mind you, in this case they would be liable for the strike price on the shares. I doubt they will be extremely aggressive. Given the way BEST was getting knocked off the ask towards the close on Friday (more short covering than anything else, I'd guess, given the action of the short MMs on the bid), they've probably hedged much of what they needed to. I expect a delaying and retreating action on the way back up to $30/sh next week, if BEST is still trying to 'paint the tape' on the closing prices each day, for some calculation of options prices as per our speculation. If Castle Creek chooses to maintain a selling program against their remaining warrants, the stock could track a jagged pattern on its way back up. So, rather than being concerned about BEST at this point, I consider CC the main player from here forward. There is no way to know exactly how many of the warrant shares CC still retains after last week, but I would hazard they've sold the larger part of the 900k shares, ie, well over 500k; tho they bracketed the stock at times and collected on the bid from retail sellers, but less than half as much as they sold (my guess). E.g., we saw far more trades came at the ask on Friday, and CC/INCA often shared the ask with BEST, so there was none of that 'super trader' action theorized in the past, LOL! Rather, naked shorts were covering by means of buying shares from BEST and CC. Net-net I'd conservatively guess that CC is completely done with 1/3, and possibly over 2/3, of their warrants. Just my speculation, however. If Valence gets additional research coverage in the near future (and we've heard of two more analysts visiting the plant in NI quite recently), and if news continues to be put out through the press that Qualcomm is quite please with the Valence cells, and if additional PO(s) come out over the next few weeks, the stock will repair fairly quickly. Factor in the need for naked shorts to cover their currently exposed condition, and you might see an accelerated move back to the high 20s or over 30 before the end of next week. Such action could quickly strip CC of their remaining warrant shares, and once BEST and CC are done as sellers, that removes the artificial cap in the stock price. I consider Valence to be a good buy anywhere in the 20s. No need to chase it, rather average in so that you can measure the action of the artificial selling (CC may appear and disappear, if they have chosen to put in place a selling program against the rest of their warrants, which I consider possible). Within the next month or two an investment at this price is likely to be handsomely rewarded. All IMHO. Regards!