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

To: FMK who wrote (7369)	1/23/1999 11:29:00 AM
From: FMK	Read Replies (1) \| Respond to of 27311

This was written for someone who took one of my numbers out of context. Scare Bull, I didn't mean my $875/sh to be taken as a serious prediction. Please let me explain. exchange2000.com exchange2000.com When I read Matsushita's announcement, I put it in the same category as T&B, and didn't see it as a serious threat. When I received a phone call from someone who was worried by it, I couldn't resist posting some numbers for comparison. If they were a serious threat, their pricing of $6+ per watt hour would leave plenty of room for Valence to sell all they could make at $2 per watt hour. I am sorry if you understood that I predicted an $875 share price for Valence. I was just playing with some numbers to help put things in perspective and make Matsushita's press release less worrisome! I do find it reasonable to expect that the present 3 lines will be running at least two shifts each by yearend and lines 4-6 will be added, perhaps one per quarter, with line 4 arriving around the end of March. I would estimate that they should ramp to a 300 mln watt hours/year rate in December. Another point is watt-hour pricing. It is my understanding that Valence intends, for the most part, to produce in high volume and leave the finishing touches to "repackagers" who will stack the cells together and perhaps add some smart circuitry to exactly match particular portable equipment manufacturer's requirements. I believe repackager/OEM product development programs have been underway since last summer. As Lev stated, he expected customers to pay $2.50 per watt-hour for laptop applications. I was earlier estimating $1.65 and raised this to $2 for general applications. When we hear $6 plus per watt-hour for a battery, it might be equivalent to Valence's final product or, instead, it might apply to a repackager's "value added" product that has been tailored for a specific customer's needs. In any case, it would appear that Valence can make ample profit at $2 per watt hour, and can probably get more for quality and performance reasons.

To: FMK who wrote (7369)	1/23/1999 11:48:00 AM
From: FMK	Respond to of 27311

Here's a correction to some controversial numbers. I have been aware of this since yesterday but so far let it stand as a naysayer alertness test. Let's just say a non-naysayer found it first and we should chalk one up for the Valence bulls! From this post: exchange2000.com <<The thickness(Matshushita) was stated as 3.6 mm which is roughly 4 Valence bi-cells. One of Valence's high speed assembly machines is capable of 240 bi cells per minute or 80 of these 3.6 mm batteries per minute. Running non-stop it would amount to 115,000 per day. Realistically, lets say 100,000 per day maximum. Matsushita's "intended" 300,000 per month seems equivalent to what Valence might have done last year with their small pilot line in Henderson. A year later, just one of Valence's high speed lines should be able to turn out Matsushita's "intended" monthly output in just 3 or 4 days, leaving another 26 or so days per month to make other higher watt-hour products that are therefore more profitable.>> Comment: Dividing 240 bi-cells per minute by 4 results in 60 3.6 mm batteries per minute. It should therefore take Valence four full 3-shift days at maximum capacity on one high-speed production line to to turn out Matsushita's "intended" monthly output. exchange2000.com This math error may soon be cited as evidence that FMK's numbers can't be trusted. In any event, I take comfort in having presented the background and basis for my numbers such that anyone should be able to determine where they came from. I always encourage anyone to make their own assumptions and to do their own calculations. It should be obvious that I haven't lost any confidence in a positive outcome, and am as anxious as anyone to see some press releases to confirm that that Lev found a way for the 270 in Northern Ireland to make some batteries!