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

To: LiPolymer who wrote (19636)	5/10/2000 5:55:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

".... hard to believe someone would be initiating (or adding to) any short positions at these levels ..." Not if you can't reconcile the current price with a price to sales multiple of 20 based on CIBC's revenue forecast. Dare to try? To get to VLNC at 14, you need to convince the market that VLNC should be valued at 21 times its forecast forward sales of 24.7M (FY2001), according to the CIBC report. OR, you need to convince the market that the CIBC analyst is understating revenues by a wide margin. Go ahead and try. VLNC reported revenue in-line with the CIBC analyst's estimate for the most recent quarter. The amount was 408,000. Companies are being trashed for reporting revenues above forecast. VLNC reported in-line. To merely justify the present price, you need to present a credible argument why VLNC can reach 24.7 M (when its current run rate is just over 1.6M or about 1/15th of the forecast total.) Or you need to offer why the market would assign a valuation higher than 20 times revenue for a company that just reported 408,000 in revenue and a loss of over $10,000,000. To justify a price of $20, you need to present a credible case why VLNC should garner a valuation 50% higher still (or 30 times forward revenue). To get back to $40, you need to show a 60 multiple of revenue. The implication is grave for anyone who bought the stock this year. I'll say one thing, at least no one here has been crazy enough to try to make that case. On the other hand, I don't think many understand the point. Mooter should understand it. It is not difficult to see. It is very significant that he refuses to challenge the point.