Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: MGV who wrote (3691)	8/13/1998 1:06:00 PM
From: Herb Blair	Respond to of 27311

Of course you are right just don't like to hear it. Herb

To: MGV who wrote (3691)	8/13/1998 2:56:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

There was new info in the conference call. You wrote:Short of renewed faith for some VLNC longs, perhaps, no substantive change came out of the cc. From a technical standpoint, I disagree. The company announced that they had installed the second coater they were waiting on delivery at the last conference call, and was making good quality film laminate. This is important because this was the part of the process that had the technical problems that delayed startup in the MarQ. The fact that the company confirmed the successful operation of this unit is a significant milestone. In my opinion, the big drop in the stock price from last fall was due to this technical problem causing a delay in startup, and the coincident changes in top management personnel. The successful operation of this unit is encouraging, since it confirms that the company was able to transfer the process capability from Henderson to NI. Its now apparent that one of the reasons Lev moved some equipment from NI to Henderson this last winter, was to get production prototype battery cells to potential customers so that they could begin their extensive time consuming testing. This appears to have been a wise move. But it was predicated on the idea that once the process was proven in Henderson, it could be transferred to NI. From what I understand, the process in Henderson is identical to NI, just not to the same production scale. From this we should expect that the process can be successfully transferred. Yesterday we got confirmation that one of the most critical units in the process has been transferred successfully. Also some on the Yahoo thread have pointed out the wording in the 10Q about prototypes not meeting all the specifications by prospective customers yet. Well, the first new prototypes were released to customers in mid-May, so the extensive cycling tests cannot be completed at this point. Its impossible to go through 500 discharge/charge cycles by this point, so this is true. But they have been cycling for some time now (about three months), and so far the results are good, according to yesterdays comments. The company also confirmed yesterday the production capacity issues that you previously challenged me on. Furthermore, the company said they expect to generate operating profits on just one line in full operation. This confirms a lot of the financial revenue projections that have been made in previous posts. This was also substantive information that had not previously been made public. The company also strongly stated that they have a proprietary position protected by patents, in this revolutionary new technology. The company also indicated that Castle Creek hired a technical consultant to review the technology prior to commiting to the funding. Finally, the company also released information regarding the delivery of three more assembly lines, including one to the Korean JV. We had not received direct confirmation of this before. Also the delivery schedule for the new lines has been accelerated. This raises the interesting question, "Why is management spending cash on buying and expanding production capacity?" Three possibilities come to mind; 1. Management is incompetent and stupid- they are buying capacity that they can't use because they can't manufacture the battery. 2. Management believes they have proven production capability such that it will not take significant resources to finish startup of their existing lines, and they have reason to believe that the demand will be great enough to justify purchasing three additional lines (one that Hanil JV is paying for). 3. This is an attempt at total fraud by company management. I can't believe the company management is as stupid as the first alternative, and the third choice seems ridiculous since the largest shareholder has just committed $10M in additional funds for Valence. There is no evidence here of a pump and dump. In fact the current insiders have commited themselves to large purchases of stock at prices higher than the current prices and loaned significant funds to Valence, in the last 8 months. All in all, there was a lot of substantive new info in the conference call that supported the discussions by the bulls on this thread. The delay in the analysts visit and the indication that potential customers hadn't started design-in activities yet, were the only two new negative information that I heard. Paul