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

To: FMK who wrote (5041)	11/15/1998 10:09:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

FMK, your broker must have responded to convertible preferred, not the floorless kind (the street call these sequential preferred, the term "floorless" is unique to SI). In the last two years, I have looked at 25 or so issues that had a variety of floorless securities (they come as debentures, preferred shares and sometimes convertible notes). Not one is a success. Actually, VLNC is one of the better performers in the group. My first floorless was AKSEF, and it took sometime to find out (I had to conjecture at the time because it was a reg S), I donned the $2 hat and finally bought the stock when it appeared to me the floorless was all converted. It went back to $6.5, were I was fortunate to sell. The end of the story was that Aksef damaged itself so much, that despite a fabulous find, they went on the block at $2, but not before they visited the low 1'. Here are some of the "dead", CTYS (had big argument on SI with a professor of Finance from Chicago Univer. he believed that the big existing investors will bail them out, they are bankrupt, commons got zilch). HAYZ, one of the first floorless, bankrupt. AIPN, called it at $3, it went to 7 and then sunk under $1. Right now at $2. TTRIF, a "leaky floorless", call it at $3, now at 1/8 (share count went from 15 MM to 150 MM) CHTL, from around $2 (which was already down from the 20') to a penny or so. EXSO from around $1 to a penny or so. CAFE essentially bankrupt (reverse splits and 99% decline) This one, the floorless owner, the "bandit" was the President of the company and members of his family, and the thread kept saying it is in his interest that the stock goes up. Surprise. GATE (was ZYCD), went from around $5 to $.5 when we identified a conversion and jumped on for a five bagger. A new semifloorless was set up later at around $2 now it is $.5 after visiting $.25, survival in question. IELSF, Called this one as a floorless at $4 now it is 1/32 to 1/16. Not even a year. Here are some that are still breathing and the jury is still out. They have all compelling stories balanced by floorless instruments (in essence a situation similar to VLNC) HEC a partial floorless (there are three independent instrument with various floorless clauses) called at $5 went to $2.5 now around $3. The story is potential very big oil reserves. Could be a "turnaround" later this or next year. REFR and RNTK. They both have a floorless. They are both in the business of licensing technologies and hope for a big breakthrough. RNTK was called at $3 went under $.5, then the big news broke it bounced to $1.5 and now is going back down at $1. REFR still have most of the funds raised from the floorless, and the company kept the option to put the stock to the floorless holder. A better case, if their technology will be deployed. Additional floorless: ANCR from $9 to $1 now at $2.5. INPR from $10 and still leaking in the 5'. RACE from $6 to $.5 and now bounced back to $3. IDBEF from $5 to $2 and now about $2.5 CFON, peaked at $15 last year and sunk to $2, now around $3. There are few cases where the companies recognized the problem and bought back the floorless, like MABXA (from $2.75 to 5/32 where management and others bought a bunch of shares at $.25 and the funds where used to retire the floorless and convert the rest to a floor at $.5, the stock is now responding positively. Similarly CARN did a similar thing but not before the stock went from 6 to the 2'. FIBR might belong to this category as well stock went from $12.5 to $1.75 when the buy back was organized, never went back above about $6. There are few "hybrid animals" like AND, GZTC (the holder of the floorless is the parent company went from 13 to 2 and now is back at 6), where the "floorlessnes" is less clear. Thus from these 23, the dead are coming up to 9, the heavily wounded to about 10, and the walking wounded about 5, and REFR is still alive. I do not have statistics on all the floorless that have been issued in the last two years, I would guess about 200, and I would guess that half of these are in the heavily wounded or dead category. Zeev