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

To: The Vet who wrote (21275)	8/25/2000 7:05:10 PM
From: Rich Wolf	Read Replies (3) \| Respond to of 27311

re: short interest Given the tactic of 'boxing the short' position, but not closing it out, a modest calculation would put no more than half of the short position as naked. Castle Creek has 1.25M shares or so (if memory serves) and maybe 350k sh from cashless exercise of warrants... we have presumed all these to have been shorted long ago. We also have the 1M lawsuit shares (350k for the lawyers, the rest for the plaintiffs) that were likely shorted (not sold outright). Other large shorts have often found it convenient to box and not close their short positions... since they collect interest on the shorts, in most cases (splitting the interest with the brokerage, a perk offered large accounts). Etc. Conversely, it is hard to imagine a large-scale short attack being initiated at this point in time, and at this price point. Rather, I expect them to step aside whenever there is a rally, then look to cap the stock when the buying interest wanes, even suckering in more buying (premature) at higher levels, before shorting it down 50% of the run or more. Granted, it is a dangerous game they play, if the downside is as limited as most longs believe it to be. That is why I expect any required 'covering' or new shorting to occur by means of a 'mark up' and then take-down, rather than a driving down as we saw in the past, esp. in April. This short gambit has been widely exercised since April on many equities I follow. The shorts seem to believe they have time on their side, so they will continue to control and bracket the stock, all the while slowly extricating themselves from a short position. The important point is to observe that the quoted short position is often not fully naked, maybe only 1/2 or 1/3 in this case. If we get a great run on really big news (more than shipping to existing POs or the IDB monies, which are both factored in already), I wouldn't be surprised to see the stock manipulated up very high, say to 30, and after a time taken all the way back down to 20ish. This is more likely to happen on news of a laptop product. And then we move big-time for good when it's justified by the market, not because of a short squeeze. The market underwent a paradigm shift in April, so throw out any data points for TA that are prior to that point. Now it is about real earnings growth.... which earnings I believe Valence will see over time. Just another opinion.