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

To: Jacques Tenzel who wrote (6990)	1/11/1999 8:56:00 PM
From: Mark Johnson	Read Replies (1) \| Respond to of 27311

Jacque: Thanks for sharing the last post. Many of us longs have supported the company and understood the litigious nature of Valences investment predicament. Because of piranha type lawyers (maybe visnic could help on this one) an open type discussion is impossible because of possible legal problems. In order to come to an objective analysis one needs to observe and balance all avenues of information. Unfortunately we have to put up with screaming alarmist who exaggerate unreasonable scenarios. These price dips, in my opinion are gifts to investors who are sitting on the sidelines, wondering whether they should get in. Lev said he expects revenue. That sounds positive to me.. Good Luck!

To: Jacques Tenzel who wrote (6990)	1/11/1999 9:20:00 PM
From: MGV	Read Replies (1) \| Respond to of 27311

The conversation you report sounds plausible. It also appears to be an objective statement by someone who owns "a large position in VLNC." It is notable that the one example cited for Dawson's reported reluctance to provide straightforward projections is the "breakeven on cashflow" statement that FMK spun into outright bottom line profit. Its somewhat ironic that the guy who would claim the description as the most dogmatic long on the thread, is the one who likely throws more concern into the management of VLNC about the threat of shareholder litigation. In other words, but for the misinterpretation by the more dogmatic, other investors likely could count on more frequent, more specific corporate information. The fact is that corporate management is justified to be gunshy of the irrational longs. That profile is the one everytime that ultimately cries wolf and falls into line in a class action. It is not the shareholders and potential shareholders who retain healthy skepticism that represent litigation risk.

To: Jacques Tenzel who wrote (6990)	1/11/1999 9:20:00 PM
From: Larry Brubaker	Respond to of 27311

Jaques, I thank you as well. Given your history of posts on SI, your statement about it not being your pattern to post heresay rings true to me. A couple of observations. I found Lev's comment about "twisting his words" to be interesting, particularly since the example he gave was one in which FMK twisted his words about "breaking even on a cash-flow basis" to mean "the company can earn a profit producing less than one shift with one line." Yet it is those who try to untwist FMK's spin that get called names on this thread. Secondly, Lev says to read the SEC filings. FMK says to ignore them. Third, Lev says the SEC filings will provide a clue about the status of production (e.g. increased burn rate, inventory build-up). As of September 30, those clues were absent from the financial statements. It will be interesting to see the year-ending 10-Q.

To: Jacques Tenzel who wrote (6990)	1/11/1999 9:44:00 PM
From: FMK	Respond to of 27311

Thanks Jacques, for your timely and very relevant post. Your notes confirm what I have heard from my sources. Here is a "status" summary I recently posted. Let's see how it fits with the content your friend's conversation. From: +FMK Thursday, Jan 7 1999 10:41PM ET <<...I share your opinion that the picture for Valence is much larger than the palm pilot. Without naming customers, we could look instead at total watt-hours production capability. At the moment we should have two high-speed lines plus the Klockner. Their total capacity should be roughly as follows, using slightly higher specific energy than previous version specs: Line 1 8000 per day x 34 watt hr 272,000 Line 2 33,000 per day x 6.5 watt hr 215,000 Line 3 33,000 per day x 6.5 watt hr 215,000 total 700,000 wh/day x 340 days = 240 mln wh/yr. To break even, it should take 1800 per day x 34 x 340 or 20.8 mln watt hour per year. 20.8/240 equals 9% max capacity of the first 3 production lines to break even. The maximum capacity, of course, requires 3 shifts. By the end of the year, there should be 5 or 6 lines in NI. 1 shift per day for just the first 3 lines is 240 mln wh/3 or 80 mln watt/hr per year. Remember it takes only about 20 mln wh/yr to break even. 80 minus 20 equals 60 mln watt hr beyond that. It would seem reasonable that we should easily be running 1 shift per day on the first 3 lines by April, if not before, since there were already 270 employees in December. By that time, 1 shift per day production should be about 80/20 or about 4 times what would be required to break even. A contract or two in the meantime would convince us that it is really happening. What is the 60 mln watt hours past breakeven worth? At $2 per watt hour about $120 million. At 33% profit divided by 30 mln shares it amounts to about $1.30 per share earnings, just from one shift per day on 3 production lines. As Lev has indicated, laptop batteries will likely sell for $2.50 per watt hour, making $2 reasonably conservative. Are they going to make it? I still estimate the probability at 99.9%. I have repeatedly missed on the timetable. The increase in headcount from about 60 to 270 and the recent statement about "shipping in earnest" should indicate that April shouldn't be far off. If they don't take delivery of any more production lines and stay at 1 shift per day on just the first three lines, they should earn enough to justify a ($1.30 x 25PE) $33 share price without considering the joint ventures or future royalty income. This was just another way to evaluate the situation. I feel very comfortable being long the stock!>>

To: Jacques Tenzel who wrote (6990)	1/12/1999 1:11:00 AM
From: P. Ramamoorthy	Respond to of 27311

Jacques - That's the way to do it! Report earnings without pre-announcing sales contracts and let investors sweat a bit! Thanks for the post. Most CEO's are taking this approach because of the frivolous lawsuits. I'd understand if he commented he would comment on stock's value, but wonder why he comments on the price volatility. He is consistent though. Ram