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

To: Bruce A. Thompson who wrote (6415)	12/29/1998 9:57:00 PM
From: Bruce A. Thompson	Respond to of 27311

What's a Million Dollars Between Friends? by: bathompson (47/M/Greenville, NC) 444 of 455 Two weeks later... Miracles Inc., today announced $6 million in new financing. The money will be used to supply miracles to their newest huge customer that will be buying more miracles than ever sold before. This will be an on going relationship and will result in huge record profits landing immediately on the bottom line. "OH MY PORTFOLIO LOOKS FANTASTIC NOW" shouts Hypester on the message boards. "BUY NOW BEFORE THIS ONE GOES TO THE MOON" Joe investor starts toe wetting positions in the stock while doing due diligence. The company looks pretty good on paper and it just got $6MM in new financing so it must be OK. Buy more. Meanwhile, back on The Bahama Mama, Spiral asks Wenie if he got the Convertible Preferred Floorless issue ready to go yet. The stock price has doubled in the last week and should double again in another week. Wenie says YES, so Death Spiral picks up the satelite phone and calls his broker in New York. "Short $6 million in Miracles Inc" he says. "Make the proceeds check payable to Miracles Inc. and hand carry it over to them today. They should have some Preferred Stock certificates for you to Pick up when you get there".............

To: Bruce A. Thompson who wrote (6415)	12/29/1998 10:06:00 PM
From: Bruce A. Thompson	Respond to of 27311

What's a Million Dollars Between Friends? by: bathompson (47/M/Greenville, NC) 446 of 455 Floorless Convertible Preferred Stock: A stock issued in security for a loan to a large investor. It carries an interest rate at or above the market payable usually quarterly and in shares of common stock. It is convertible into shares of common stock. While it is unconverted, it is not equity so the stock is not diluted. Since the conversion is figured in dollars but payable in common shares, it is to the advantage of the convertible holder that the share price be as low as possible when converted. This maximizes the return in shares of the company............. Two weeks later aboard The Bahama Mama....... "The stock price is getting up there" says Death Spiral. "I think it is time to short some more". "I'll just use the Preferreds as secutity" Picking up the satelite phone, Spiral calls his broker and shorts another $6 million worth of Miracles. The upward momentum stops and moves to the negative zone. At the same time Corporate Wenie has been busy........ Miracles Inc., today announced the IPO of 6 million new shares of common stock. With the announcement miracles also announced that all of the insiders have filed form 4's notices of intention to sell all shares held by them in the open market. Stock Defective announces that thier research reveals that the insiders intend to short the 2/3 of their holdings that are restricted and can't be sold. "DON'T WORRY, EVERYBODY DOES IT" Shouts Hypester on the message boards. Retreating from the pressure of all the insider selling, the stock price begins falling. It is now @ 90% of it's all time high. "Short another $6 million" Death Spiral tells his Broker.......

To: Bruce A. Thompson who wrote (6415)	12/29/1998 10:11:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 27311

Bruce, first thank you for the compliments, second, I am really sorry you did not heed my forebodings re CTYS, I did my best and took even more abuse then I am taking here, particularly in view that FMK of that thread was a very brilliant professor of Economics from no less than the Chicago University (a Freedman disciple, thus a lot of respect must be heeded to his point of view as well). Why am I here? Well, it is a floorless what else? Why despite it being a floorless am I considering putting some (not much) of my SEP into this one. Well this floorless does not (yet) cover much of the equity base ( right now about $7.5 MM out of $150 MM in market capitalization), but more important, VLNC, if successful, and if managing to stay afloat could become an important participant in a multi billion dollar market, and a market that is going to grow faster then the economy. What precaution do I take not to get caught in a death spiral? A stop loss under the support area of $5/share. As I said once before (and recently, I believe on the HEC thread, or was it here?), floorless situations do sometimes present unique opportunities, particularly when they are eliminated (AKSEF, the call two years ago, "the floorless are gone", that was worth a triple bagger from $2 and change to $6.5), HEC for a short time in the next two weeks, when the repricing period will be over, and it will be in the bandits' benefit to have a healthy rally (I estimate to $3 or higher) into which they'll short with abandon (they will need bunch of volume and what better then some bullish Islero announcement to get millions of shares trading daily into which they can short?). But, as I said, I am not ready yet to be a long term investor in VLNC until the floorless situation is completely clear, yet, in the meanwhile there are going to be rallies and retrenchments which are quite tradeable. Zeev