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

To: P. Ramamoorthy who wrote (22229)	11/11/2000 9:30:30 PM
From: MGV	Read Replies (1) \| Respond to of 27311

If there were meaningful royalties to be paid on disruptive technology, VLNC would be a subsidiary by now. The telecordia IP was exchanged for speculative paper. The price was cheap. Those of you who think VLNC got a good deal are half right. The price was very cheap. Quid pro quo. Status check: VLNC tries for years to manufacture. It tries to go to market once and crashes. It starts over and tries to go to market a second time and decides, dadgummit, it won't crash the same way again, it will change its business model! Thats right, no more of the manufacturing stuff. Forget the manufacturing disappointments, change suits. Presto! VLNC is a licensor. Now consider the objective data. What choice do you have? You certainly don't have many answers as shareholders. The marketplace for battery technology provides objective data. It is an efficient, highly competitive market. So what value does this market assign to the IP? The answer is: paper for less than 1/10 of a speculative manufacturing company with an unimpressive track record of producing and delivering, be it product or forecasts. Garbage in, garbage out. CIBC writes: "The business model is a little unclear at the current time as we transition." The analyst also revises down FY01 revenue by a little more than 60% to $9.2 million from 23.1 million. That's right, down by roughly 60%. But that isn't all, forecast loss for FY01 is going UP. Forget the loss of $0.78. Now the estimate is a loss of $0.90. 60% lower revenues and greater losses in FY01. Though the business model is "a little unclear at the current time" and it would follow from this conclusion that visibility naturally would be substantially lower, the analyst goes on to hazard FY02 estimates. They include slashing revenues by greater than 50% to $50 million from $104 million and leaving the bottom line unchanged to the penny! Must be a wooly model. Imagine all the lack of clarity and yet, his model projects 18 months out that, despite a drastic change in model, the bottom line will not change at all. Belieeeeeeeeeeeeeeeeeeeeeeeeeeevah! Forget the analyst's model. The change in the business model may have something to do with a mere 5% "ramp" in manufacturing revenues to a level all of $100 thousand higher than last quarter. Can you say "Plan B?" Now, the expectation is that the Hanil JV will be "unwound.: Now, the explanation is that "The company scrapped a significant number of ..... questionable batteries ...." One familiar result was "delays ............................in the delivery of automated high speed packaging equipment which could also impact revenues in the December quarter." Finally, contrary to the silly breathless "predictions" of Hanil JV starting on 9/22, revenue from ALA, laptop battery contracts with AAPL, PDA contracts with Compaq, and other irresponsible and churlish hints of special information of imminent large sales, no new business was reported to have been won. The contracts were for 100,000 cells for mobile phones, 100K cells to Quantum, unspecified # of cells to a US-based supplier of telematics systems, and approval for testing in combination with ATK. Bottom line: operational disappointments and downward revisions. Spin away now.