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

To: lws who wrote (6903)	1/8/1999 12:46:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

lws, you make a very good point. With VLNC's market cap in the $200 million range, the market certainly seems to expect big things from these guys. VLNC's market cap is about 3X ULBI's, which has existing sales, has $30 million in the bank, does not burn through money nearly as quickly as VLNC (thanks to those existing sales) and does not have the possibility of a floorless conversion facing it. Thus, it seems that the market is telling us that it expects this time is no false alarm. Of course if this time is a false alarm, VLNC probably would fall much further from here than ULBI would be likely to if they also would deliver a false alarm, without even considering the added impetus of a floorless.

To: lws who wrote (6903)	1/9/1999 10:02:00 PM
From: MGV	Read Replies (4) \| Respond to of 27311

Just a couple of short responses to some of your questions lws: Fourth, what is the basis of comparison for your conclusion regarding execution? I am not aware of any competitor which has "executed." Why would you expect their record of execution to be smooth when no one else has executed either? There are many companies who have demonstrated a capacity to execute: VISX is one, WCOM is another, EMC is another, SLR is another. In terms of competition, Sony is one, Sanyo is another. All of these companies have demonstrated a capacity to manage design, production, and distribution in the course of bringing a product to market. VLNC has repeatedly delayed, changed officers, and at least once it has had to change its entire strategy and core technology after representing they were "on the cusp" of producing. It has demonstarted no track record in either design, production or distribution. It has no revenue after how many years? How do you know the investment community thinks it cannot execute? Evidence of that conclusion is suggested by the failure of any, I repeat "any," firm to include any coverage, pro or con, of VLNC. It apparently does not rate suficient interest to persuade a firm to invest time in following it. Now, if it were an unknown firm that is relatively new, that would be less significant but, at one time, VLNC absolutely did have the street's interest. The utter failure to execute in past episodes also paints an apparent confirmation of non-execution to the street. The one quasi-rating agency that was covering VLNC, Red Chip, likely felt they had been burned by VLNC immediately prior to dropping its coverage of VLNC. By valuation measures, the stock price is surprisingly high for such a conclusion by the investment community. As were tulip bulbs a few centuries ago. The current stock price, to the extent it is as high as it is, likely is in spite of the street's opinion and not because of it. History shows repeatedly that over the short term, the appearance of value should not be viewed as a confirmation of ultimate, legitimate value. In other words, do not rely on a "high" value as a self-confirmation of that value.