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

To: lws who wrote (5181)	11/16/1998 10:43:00 AM
From: John Curtis	Read Replies (2) \| Respond to of 27311

LWS: You state, "There is always a serious risk to investors in a stock to fall in love with it." So, too, when you fall in hate with an issue like some apparently have(or at least with the proponents of the issue), eh? Heh!! John~

To: lws who wrote (5181)	11/16/1998 10:58:00 AM
From: kolo55	Read Replies (1) \| Respond to of 27311

I think chances of a death spiral are extremely low. And the market seems to be saying that as well. Further, if the stock keeps going up like it is today, its much more likely we get a spiraling rise. As the stock rises, it becomes more likely that Valence can re-negotiate the pricing terms on the Second Closing, resulting in less dilution than originally feared. The market seems to have priced in dilution of close to the 5M shares mentioned in the filing in August, now it seems that dilutive impact could be much less. Paul

To: lws who wrote (5181)	11/16/1998 2:15:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

lws, it will take too much space to provide a full explanation, I would suggest going to: Message 5368910 where I have explained how floorless bandits profit from the death spiral. They rarely take control of the company. They need not invest more then the initial convertible issue. Often, they recapture back their whole investment almost upfront and move to the next one with that money. Once they decide they had enough, or meet some very strong buying on the way down, they may either cover, but in most case, they convert and deliver the new shares against their short position. Quite a racket. Mind you, in a successful attack from the floorless, they can quadruple their money (and no longer have their own money at risk, apart of the time during which they set up their initial short) or more, so they often do not care that a company could be successful and give them in three years a double or more. As to the question of resources required, I think I answered it, they must be able to lay out the initial sum of the floorless, no more. Sometimes they do not even have to have that money committed at all, particularly when there is a delay time between "signing on" and delivering the cash. Zeev