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

To: kolo55 who wrote (3336)	7/12/1998 10:43:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

Although I don't agree with a number of the conclusions you draw based on available information in annual and quarterly reports and public statements by company officials (public verbal disclosures at a CC are subject to the same legal disclosure requirements as written ones - that said, verbal representations can be inherently more difficult in which to pin down an interpretation), yours at least is the first response that makes a good faith effort to respond to some key issues. You mentioned FMK. A number of his posts are suspect for being based on non-public sources and for proving to be wrong after the fact. Whether he has been duplicitous or reckless it is difficult to determine over the internet but, both are wrong and at the very least his posts have been reckless. Some of the substantive points I don't agree with: First, you taint an otherwise overall good effort to explain your analysis by summarily hanging anyone who doesn't agree with your conclusion as being guilty of "superficial analysis." What is that? Second, I don't agree with your price estimates. I know that lithium ion batteries for digital video cameras with MSRP of $80 sell for $50 to $60 in retail markets. Wholesale prices available to the manufacturer must be considerably less. Third, your projections regarding line productivity and capacity aren't persuasive. What is your source of information? If its in the 10K or part of a publicly verifiable source you would do a great service by disclosing the source to others. If the source is not part of publicly verifiable information, how can you reasonably expect people to accept it as probable. Fourth, 80 to 90% probability for mass production by September must be taken as being shot from the hip in the absence of an analytical framework for evaluating probability. Paul, to the extent you sought to discuss the merits of the company, I appreciate your discussion and the time it took to post it. Most of your points are ones on which reasonable men can differ. Your reasonable side must have come from CMU (smile).

To: kolo55 who wrote (3336)	7/13/1998 12:05:00 AM
From: FMK	Respond to of 27311

Great Post Paul! - appropriately conservative. Best Regards, F.M. Kellett

To: kolo55 who wrote (3336)	7/16/1998 1:34:00 PM
From: Javelyn Bjoli	Read Replies (1) \| Respond to of 27311

Paul, I'm a little late responding, but your long post was right on, and the most useful thing to hit this thread in a year. Here is my take on your questions & answers: Q: What is the market for VLNC batteries? A: All major notebook and cell phone makers are highly aware of this technology and have been investigating it for probably over a year. Many have designs for ultrathin products on the drawing board. The holdup has been battery (chemistry) performance and lack of manufacturing capacity. Your 3M notebook batteries per year is a reasonable number to target for VLNC. Your $75 per battery target is also reasonable, given that a cylindrical pack would be ~$50 and VLNC is seeking the thin market where they can get a higher price. They cannot compete with cylindrical on price alone. Q: Will they have negative margin? A: In the long run, this will depend on yield and competitive quality. In the short term, nobody is going to care - people just want to see them make product. Q: Will they run out of money? A: Financing is close at hand, but nobody should breathe easy until the deal is done. If production of the notebook batteries begins on time, they may be able to get revenues from that before the financing closes. Q: So what is holding the stock price down? A: The company has a very bad reputation from the past fiasco, and knows it. The industry does not trust them and will not believe their story until they deliver something concrete. Delays in production, departures of key staff, and the return of the guy (Lev) who presided over the last disaster, all make the company look inept. Stock price is a measure of future "trustworthiness" and right now, nobody is willing to look out very far on VLNC. The first people to change their minds will be the potential customers. With delivery of the latest (potentially production)chemistry samples, the testing clock starts right here. Volume production, close of financing, and completion of testing by early customers should all be visible to the outside world by the end of the year. Buying ahead of the announcements is highly speculative. I don't know why Mark V picked this thread, but his advice to lurkers is clear and true: your money is under a lot of risk until the company proves itself. Personally, I'm glad to see some balance come back to the thread.