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

To: Jay Lowe who wrote (6109)	12/19/1998 10:12:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

Jay, I went back and reread the last 423b and the last (12/10) s-3A. I must say, shame on me for missing a very important point in the original 8-k. I was so concentrated on the January 27 issue of the "material order" that I completely missed the point that whatever the performance of the company, by July 1999 the preferred becomes floorless. I presume that the underlying assumption of management is that by then the stock will be well entrenched above the ceiling of $6.03. I think this is a grave strategic error (Hayes made exactly the same error and today they are broke), or at least were forced into a corner. Not only we can have resumption of the bear market, where issues trade at discount to actual results (and by then VLNC actual will still not justify $6/share), but Mr Murphy could throw a curve and cause a delay of more than six months in delivery of batteries. That will put the company in dire cash flow problems, and the floorless could hit with vengeance. If the stock breaches $7.25 I'll be out of my toe wetting position until I can have better visibility of the situation. Zeev