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

To: mooter775 who wrote (5947)	12/14/1998 2:09:00 AM
From: Larry Brubaker	Read Replies (3) \| Respond to of 27311

Mooter, those were Red Chips estimates, not mine. After listening to VLNC CC's and reading their PR's for over a year, I have heard too little concrete discussion about equipment capacity, production yields, sales prices, or projected margins to form my own estimates. Therefore I reference back to the Red Chip projections to compare to FMK's projections. As I noted earlier, Red Chip estimated the total revenue-generating capacity of Line 1 to be $40 to $60 million (2-3 million units X $20 per unit) while FMK estimates it to be $300 million (4 million batteries X $75 per battery). Certainly it is possible that Red Chip's projection is outdated. However, I would be more willing to make this leap if the company itself had said, for example, that the capacity of the equipment has doubled after the substantial redesign they worked on through 1998. However, the only real numbers I remember hearing during the CC's over the last year was the capacity of Line 1 was 5 cells per minute and that they could break even (on operations, but not cover depreciation) at 1,800 batteries per day. If you play around with these numbers, you find that they are closer to Red Chip's estimates than FMK's. Another reality check of FMK's numbers is the question Zeev put forth which has yet to be answered. He indicated that FMK's number of 4 million batteries would represent 25% of the worldwide laptop market, and questioned whether it would be reasonable to expect that VLNC could capture such a large market share after 1 year of production. Any comments?