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

To: Larry Brubaker who wrote (4145)	9/10/1998 3:01:00 AM
From: MGV	Respond to of 27311

Sure Larry, based on some of the representations made on this board, I understand your reference to reduced cap ex. costs. Two things bother me about that representation. First, I would like to know what portion of the $20 M annual burn was attribuatble to cap ex. Whatever it was, with production one should expect the burn minus cap ex. portion to rise substantially in production. Even with a gross margin as high as 50%, if you accept the revenue amounts hypothesized by some, the COGS amount to 37,500,000 alone. That amount of course does not even include SG&A. The numbers that are being suggested are not convincing. They look to be half-baked (with faulty ingredients to boot!). Then we come back to the share price. The share price should not be ignored. Consider that the company is operating in a high profile industry sector. Its potential product is as sexy as they come. If you buy the story then you believe they are about to announce material contracts any day (klemencic, mooter and fmk this summer have all represented estimates of contract wins to take place in August, September, or at the absolute latest early October). Why is the price going down? Its not the overall market. VLNC was down substantially as the market was setting new highs in July. It was down substantially as the market rallied substantially on Tuesday. It doesnt add up. The company is not operating in a vacuum. It is reasonable to expect that progress to contracts would yield at least a moderately rising share price for a product that is so potentially, theoretically marketable.