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

To: Larry Brubaker who wrote (9248)	3/13/1999 4:27:00 PM
From: Rich Wolf	Read Replies (1) \| Respond to of 27311

Larry, one more time: it's VERY UNLIKELY that CC would have borrowed shares to short, and have to pay interest on the borrowed shares, when they could have done it much more cheaply by pledging their converted OR unconverted shares as collateral. Let's assume they're in business to make money. That was your assumption, too. Then they would choose the latter course. And then we would have seen a decrease in the number of shares 'beneficially held.' We did not see any more than 356,000 shares, leaving 1,375,919 shares still long and not shorted against. The ONLY LOGICAL conclusion, assuming they WANT TO MAKE MONEY, is that they did not go short the way you describe. In fact, they'd PREFER to go short against their own, since doing it that way decreases their 'beneficially held shares,' and by keeping themselves below the 5% level, they simplify greatly any reporting to the SEC. So, IF they wanted to go short as much as you propose, they would choose to do it by using their own shares as collateral ('pledging' them, not even needing to convert them). I think you need to consider the landscape is other than you would like to see: CC is long because they're bullish, and they've got a lot more inside information than any of us. Short-term in-out hedging is fine, and I'm sure many other institutions and individuals all implement such tactics. But CC is severely limited to 30,000 shares/day except during very heavy volume. And the fundamental FACT is that on Jan. 31, over 900,000 shares were short that are in NO way related to CC. Those shares, mostly from the Nov-Dec runup, have yet to be covered, I'll wager.