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

To: Rich Wolf who wrote (23190)	2/16/2001 1:32:18 AM
From: P. Ramamoorthy	Respond to of 27311

Rich, The news about the computer model got my attention too because I preach the benefit of modeling to the management such as reducing development costs and cycle time. The number of phosphate material combinations (171) is interesting, some requiring the expensive meso-phase carbon from Japan and another variety requiring the inexpensive graphite. The graphite variety may find itself in the toy market and hand tools. I am still going through my notes and reading between the lines. In spite of the Telcordia deal, the reason for the price drifting lower was the lack of acknowledgement of VLNC potential by the investor community. The short covering could give it a brief spike but the long term stock price appreciation has to come from future earnings potential. Traditional methods of stock valuation have changed for technology companies since Intellectual Property and business model are difficult to value. By continuing to invest in R&D and issuing several patents, VLNC may dominate the phosphate technology and therefore the battery market. One would project the market growth for Li poly battery, assign a market share to VLNC and licensees and calculate earnings from sales plus royalties. VLNC business model has changed. $45Million for the IP acquisition is not cheap. How to value these? Some may be cautious and wait for the earnings to show up in the bottom line. Will the price wait for these folks? The price will not stay low when the earnings show steady growth. The market is forward-looking. At 20 cents/whr VLNC can control the li poly battery market by manipulating the margin like the Japanese do. Lev keeps adding more technology for license and sale, for example, VPM = the Valence Packaging Machine. The need for a large scale up and ramp up issues is interesting. There were comments about certain major corporations that are vertically integrated are also interested. Lev seemed to like their business. He did not elaborate. jmo Ram