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

To: Pallisard who wrote (5005)	11/13/1998 8:22:00 PM
From: kolo55	Read Replies (4) \| Respond to of 27311

I thought thats what the question was. Man, after the post purported to be a word for word transcript this afternoon, I thought I was losing my mind. I wondered if I imagined the whole thing. The financing doesn't mention anything about shipping batteries. Here was the post I prepared this afternoon, before the purported transcript was published: If I remember, the questioner asked something like: If you don't have a contract and shipping batteries, then on January 27, the conversion price will be adjusted, isn't this true? The correct answer is no. First, the company doesn't have to be shipping batteries, simply announce a material contract. Second, the conversion can occur anytime after January 27, not necessarily on January 27. Third, the conversion occurs at the option of the holder, and they would set the timing; its not an automatic thing. And the holder would make this decision based on a host of issues. If the stock price is above the current conversion price of 6.03, then the holder won't convert. As long as they hold the preferred shares, they get 6% more face value annually that can be converted at 6.03. Thus the preferred has 'time value' associated with it. At Valence's current stock price, the holder would almost certainly not choose to convert. Even at a somewhat lower price, the holder would likely not choose to convert. If the price of Valence stock is lower, then the holder would almost certainly wait until after January 27 to make sure there wasn't a contract announcement at the last minute. Then they would wait at least ten days for the negative impact to have an affect on the stock price, and establish a lower conversion price. In practice, the earliest one would expect a conversion is probably mid-February. It is during this period that many 'fear' a Castle Creek shorting blitz. Some on this thread and Yahoo have implied that Castle Creek benefits from shorting the stock down before that time. This is nonsense. The most important thing is the material contract announcement. If the current line has produced good quality batteries, then I expect getting some sort of material contract is easy. Just set the price low enough and sell at loss. (This is the tactic that Ultralife used recently with Mitsubishi.) Of course, as CEO and a large shareholder, Lev is probably trying to optimize shareholder value( not eliminate all possible risks of owning the stock, at a significant cost to shareholders). The questioner said something like "shipping" in his question, and this isn't mentioned anywhere in the SEC filings.