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

To: barrcuda who wrote (2785)	5/4/1998 1:10:00 PM
From: Mark Adams	Read Replies (1) \| Respond to of 27311

Redchip Review dropped coverage of VLNC, saying that near term cash issues may force VLNC to seek additional financing at terms less than favorable to stock holders. Found this Sunday in the most recent issue. FYI

To: barrcuda who wrote (2785)	5/4/1998 1:20:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

I think this is it. I have been buying a few ULBI shares to add to my big VLNC position, which I expanded substantially on the last price excursion below 5. I'm trying to hold a basket to participate in the sector. The Lehman earnings estimate in a way confirms some of the earnings projected on this thread for VLNC. Given the money ULBI just raised, about $28M, they should be able to build capacity roughly similar to VLNC, but probably still smaller. So the $2.00 a share Lehman has, given the 10.5M shares ULBI has out, leads to an annual profit of $21M per year. This could be similiar to what Valence could earn in calendar 99, given the capacity ramp lead time Valence has. Dividing this profit by the current Valence shares of about 24M, and I get about 90 cents a share. And I believe that Valence should be able to out earn ULBI, so I think this number is low. Given this, VLNC shares look like they are priced ridiculously low. Finally, the recent purchase of $3.2M worth of VLNC stock at $5.06 by Lev Dawson, using a promissary note, is very bullish IMO. He has to pay interest at 5.25%, due at the end of each calendar year (this December he will have to pay about $170,000). He also would take all the loss, if the stock price craters. He didn't have to exercise these non-qualified options now. The only reason I can think of for him to assume the risk at this time, is to avoid paying the tax due, if he was to exercise these options when the stock is at a higher price. In summary, I think he is expecting a large stock run-up this year. These are both speculative stocks, and each person should evaluate the risk/reward carefully. But given the Mitsubishi and Samsung announcements, there is a large market for these batteries, and both VLNC and ULBI should begin shipping in volume this year. A great sector investment opportunity, IMO. Paul

To: barrcuda who wrote (2785)	5/4/1998 9:56:00 PM
From: FMK	Read Replies (2) \| Respond to of 27311

David - Here's an eye opener ULBI's offering reminds me of a comparison I once made between VLNC and ULBI. After the recent offering, ULBI has 8.9 plus 2.5 = 11.4 million shares outstanding while Valence has about 23.7 million. It is known that the Valence high speed Italian lines have twice the capacity(batteries/year) as their line 1. Valence's first 3 lines therefore have 5 times the capacity of Valence's line 1 and therefore 5 times the capacity of ULBI's similar solid polymer line from the same Florida manufacturer as Valence's line 1. Comparing Valence's first 3 lines with ULBI's single line and adjusting to a per share basis, (5 x 11.4/23.7 = 2.4), it appears Valence has 2.4 times the solid polymer production capacity per share as ULBI. If you can project earnings according to production capability and can assume that ULBI is fairly priced at $14 , it should be reasonable to conclude that an equivalent price for Valence would be $14 x 2.4 or $34 once they announce contract(s) and get some analyst coverage as ULBI has done. An underlying assumption is that the bulk of ULBI's future earnings will be derived from solid polymer batteries. As stated in their press release:"..Lehman sees enormous growth potential over the next several years, fueled by highly promising lithium-ion solid polymer rechargeable batteries." Another way to look at it is that a dollar invested in Valence at $6 buys 14/6 x 2.4 or 5.6 times the solid polymer production capability. Regards, FMK