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

To: Pallisard who wrote (4535)	10/25/1998 5:59:00 PM
From: FMK	Respond to of 27311

Pallisard,I don't remember estimating quite that high. I remember working some numbers, however, and estimating laptop earnings at $1 per shift. I would not be surprised if line 1 can break the company even at 2000 per day and will turn out over 8000 good batteries per day. If the first 2000 break the company even, and profits must equal the burn rate of say $18 million per year, then each additional 2000 batteries should be able to earn another $18 million or about $25 profit each etc. Overall, I feel its safer to keep initial estimates at around $1 per line and to chalk it up as a pleasant surprise when it turns out higher. After all, 3 lines totaling $3 per share earnings is as big a number many would be willing to believe, until shown otherwise! We may have to endure being ridiculed if our estimates were too low, but I expect we will cope!

To: Pallisard who wrote (4535)	10/25/1998 6:44:00 PM
From: FMK	Read Replies (1) \| Respond to of 27311

Pallisard, Here is a comparsion table posted about a month ago, The Valence numbers seem reasonable. New information for ULBI (Valence's closest competitor for rechargeable Li polymer batteries) has been presented on the ULBI Yahoo thread. Here is some data for comparison. ULBI's line 1 can presently turn out 12,500 watt/hr per shift as posted yesterday. VLNC equip is believed closer to max designed capacity but best guesses for maximum design capacity for both are shown. The information has been stated during conference calls or has been posted before. OEM customers generally pay in proportion to a battery's energy storage capability measured in watt-hours -------------------ULBI#1---VLNC#1---VLNC#2-VLNC#3 mfr----------------Klockner---Klockner----Arco-----Arco product--------------cellph---Laptop----cellph------cellph max batt/mn----------50--------10---------25----------25 wh/batt----------------2---------35----------5-----------5 wh/hr----------------6000-----21000------7500-----7500 wh/shift-------------48000----168000-----60000--60000 wh/3shx350------50.4mln---176.4mln----63mln---63mln Total annual-----------------ULBI----------------VLNC watt/hr------------------------50.4mln------------302mln rev@ $2 per wh------------$101mln----------$604mln sh outstanding-----------------10.5mln----------25.5mln watt/hr per share---------------4.8-----------------11.8 Ultralife(ulbi) has priced their cellphone at $4 to $5 per watt-hr depending on volume. The price per watt hour negotiated for large contracts is an unknown and will likely vary with application. $2 is used here for a conservative average. The present max capacity for ULBI is 50.4 million watt/hr per year vs 302 million for Valence, not including their joint ventures. Although ULBI plans to dilute their stock to raise money for more equipment, their present 10.5 mln shares before dilution is compared 25.5 mln shares for Valence. From the comparison, it appears a share of ULBI can be purchased at $6 and the shareholder will own 4.8 watt-hr per year of LiPolymer manufacturing capacity. As an alternative, $4.50 will buy a share of Valence with 11.8 watt-hr per year of LiPolymer manufacturing capacity. Each share of Valence has 2.5 times the watt hour capacity as each ULBI share. Someone just posted that ULBI should jump to $20 when a contract is announced(IMO that is optimistic). At 2.5 times the LiPolymer capacity per share, what should Valence stock do when they announce a contract? Valence can obviously accept a larger contract based on their machine capacity and they have more outstanding shares. ---------------------------- Bloomberg ranked the top 15 insider purchases for all stocks by dollar amount reported during the week of 9/25-10/2. Ninth on the list was Alan Shugart's $435,000 purchase of Valence on the open market. Rather impressive that there were only 8 larger insider purchases for an entire week for all stocks including IBM,MSFT,DELL,CSCO,CPQ, MO, INTC etc.

To: Pallisard who wrote (4535)	10/25/1998 7:53:00 PM
From: mooter775	Read Replies (1) \| Respond to of 27311

$No, I am not. I am guessing the effective daily output, effective being gross output adjusted for yield. The rumor mill has absolutely phenomenal net production yields being churned out, but I certainly can't verify any of these. I think it is reasonable to calculate that every $ 100 mm of revenue would product net after tax of $ 25 mm or roughly $ 1.00 per share. And it seems possible that each line could indeed produce > $ 100 mm in annual revenue on a continuous basis, whether it be 10 mm cellphones (that's what ULBI is talking about, by the way) at $ 10/phone or 1.4 mm laptops at $ 70 per laptop. But we're really just wild-ass guessing now. So in my opinion, at least, any suggestions of > $ 1.00 per share per line on a 3 shift basis would be extremely serendipitous but not something I am counting on.