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

To: Paul Dubsky who wrote (1364)	11/14/1997 10:40:00 PM
From: Paul Dubsky	Read Replies (1) \| Respond to of 27311

ULBI just released earnings after the close, loss of $.15/share vs expected of a loss of $.20, so it may gain some ground Monday morning. The biigest difference I noticed between their report and VLNCs is the amount spent on R&D for the most recent Qtr. Vlnc spent around $4.2M while ULBI spent only $1.1M. I find this to be a significant difference. I also noticed that ULBIs price metrics were cheaper than Vlnc's, price to sales of 8+ for ULBI vs nil for VLNC (no revenues reported); price to book of $2.89 for ULBI vs $5.8 for VLNC; current ratio of $6 for ULBI vs $2.5 for VLNC; market cap of $130M for ULBI (on 5M shares outstanding) vs $185M for VLNC (on 23M shares outstanding). These all show ULBI to be priced significantly cheaper than VLNC. Now, how does one read this? Well, if you believe that the market is "perfect" and trades where it should be given the information currently available and expected, then the market expects much better things out of VLNC than it does ULBI since it has such a higher price premium. As a traditional value player, I have a tough time with this. If I didn't know anything about either company other than the stats just noted, I'd buy ULBI. But, these aren't value stocks. Maybe a good idea to have money in both? More in VLNC than ULBI, of course. But, ULBI looks like a better "value" at these levels. I DO like the higher R&D at VLNC and the JV/partners their teamed up with. Comments?

To: Paul Dubsky who wrote (1364)	11/14/1997 11:30:00 PM
From: richard hawkins	Respond to of 27311

Paul, I agree that we Valence holders have good reason to be optimistic at this time for all of the reasons you point out in your post #1364. Looking back over the year, the stock started off trading in the 4-5 range, traded up to the 6+ level in the first few months, then made the spectacular spike up to 10 1/4 in May. This spike move came out of the blue and surprised a lot of investors, I'm sure. The stock then retraced half that gain (from 6 to 10) trading in the 7-9 range since with a good median base near 8 where we are now. I think we will see another spike move before yearend and, contrary to logic, this one may also come without signifigant news (such as OEM contract or new joint venture - the catalyst we've all been looking for to spark the next move). The market environment over the last 6 weeks has not been conducive to "out of the blue" type moves; but Valence has shown good stability and resilience through this turmoil which bodes well for it once the market is perceived to have stabilized. The dismissal of the class action suit removes a dark cloud that was hanging over the stock. A lot of money has come out of '97 high-flyers and these speculative dollars will be seeking "high potential growth", a category which certainly describes VLNC.

To: Paul Dubsky who wrote (1364)	11/14/1997 11:45:00 PM
From: wm sharp	Respond to of 27311

Paul & all - A few additional observations on your shareholder profile... Looking over S&P's most recent report (soon to be updated) and Red Chip's, it looks like we have about 23M shares in the hands of about 800 holders. 24% of the 23M are held by insiders and, perhaps just as important, only 10% are held by institutions. In effect, there are 17M shares spread amongst maybe 700 holders, and the institutions own a meager 2M of that. Now, what happens when the institutions need to pry large numbers of shares from a relatively small group of knowledgeable shareholders who are, as you say, hanging tight? :-) I like that scenario. This overall picture suggests that the shares will be less subject to company news (witness the tepid reaction to a very significant item this week - dismissal of the litigation) and more at the mercy of manipulation (e.g. the type referenced below) and "institutional" concerns - analyst & newsletter coverage, fund interest, and media such as IBD. If so, the share price could make a big move pretty much anytime, with little explanation, as Richard indicates. This certainly has happened to us before. I think analyst visits to Ireland could have more of an impact, sooner, than contract announcements. In any case, if there are large buyers out there looking to get in as quietly as possible, I think there's hope for more of the support we saw during the recent market correction. Given what we know about the fundamentals, I think it's safe to say that the big players will want more than a mere 10% of the already slim float. Question is, how will they get them...and when. They haven't much time. Elimination of the lawsuit albatross is, IMO, much more significant than the market would suggest. It was palpable in Cal Reed's treatment of the issue in all the conference calls. The S&P report, for example, makes multiple mention of the litigation, saying "Valence believes that if the defendants prevail...damages may exceed the company's assets." (There is an S&P update due soon and, in speaking with their analyst today, I got the impression he'll be, er, modifying this section.) BTW, there is some interesting analysis of market manipulation, on the DSWLF thread. The small float of cheap shares, post momentum, with suspected institutional interest is analogous to our situation in some ways, IMO. techstocks.com Best, Bill