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

To: Zeev Hed who wrote (19944)	6/4/2000 12:38:00 PM
From: Rich Wolf	Read Replies (2) \| Respond to of 27311

Zeev, thanks for your comments regarding Tyco. Regarding how they treat the repackaging business of TDI that they will soon own, we'll just have to see. Any new owner wants to make sure his assets are deployed profitably. TDI already had customers interested in lithium-polymer cells, and the repackaging business is driven in part by customer requests to Tyco/TDI, not just Tyco telling the customer what they can/cannot get through them. Agreed that Tyco will review the potential market for new technology, and weigh the costs of investment against the benefits. One thing that improves their margins as repackagers of manganese lithium-polymer cells is the simpler packaging and recharging circuitry, since Valence has already obtained UL certification for their bare cells (gen 1, with gen 2 in process). As a point of reference, we had heard through Energizer that their repackaging division (EPS) wanted to repackage and sell Valence cells, but everything was 'on hold' until the sale was complete. This was completed Aug/Sep '99, when Moltech bought the assets. In Nov '99, Valence received a PO for Qualcomm Globalstar cells through Moltech. Valence had marketed this customer themselves. Moltech had a lot of work to do to get ready to repackage the Valence product, but they got with the schedule and were able to commence repackaging volume quantities of the G* cells in the February time frame. FWIW, we saw other cell configurations in Moltech-labeled packaging at the shareholders meeting in February, indicating there are other products being tested by customers (one was for an electronic tablet device, based on the standard 4"x4"x4mm Valence cells). So, appreciate your concern to 'reign in' enthusiasm... but by now, all Valence investors ought to know that things take time. Yet it is important to keep a finger on the pulse, since often our early reads have been proven prescient. In this context, I would speculate that there is a better than 50% probability that before summer is out we will have our first laptop PO in hand. Later this summer we will be seeing the first awareness of Valence products that are available in the consumer marketplace. The real splash will be the first laptops that consumers can buy... but this may be anywhere from 4-6 months after the laptop PO is received. I would also consider that if indeed Valence is shipping the quantities of cells to POs #2 (StarTac cells for French customer) and #1/5 (Qualcomm G* and HDR cells) that we expect they are, Valence will soon have tripped some thresholds for money from the IDB (Industrial Development Board). (They should have already tripped the first two lower thresholds, which required a total of only $2.5M of any product, laminate or cells; so the question is where do the next thresholds fall?) This would explain why the CFO reports to callers that there is no plan to do any financing any time soon... apart from considerations of a secondary in the fall, which would go towards other ventures. So, as John C likes to say, 'Let's see how it goes...' Enjoy! Rich