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

To: kolo55 who wrote (9620)	3/20/1999 9:38:00 PM
From: Steve Hegji	Respond to of 27311

Whew! After reading the last umpteen Larry/Zeev/Paul posts I realize I've got a lot to learn. I appreciate this kind of discourse - you guys are good.

To: kolo55 who wrote (9620)	3/20/1999 9:48:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

<<I believe that if Castle Creek has shorted more than 1% of the outstanding shares, about 300,000 shares, and not reported it in a 13D filing, then they have violated SEC rules.>> Paul, what rule says if you short more than 1% of a stock you have to file with the SEC? I have never seen a "beneficial ownership" statement relating to a short position. Ever. You could bolster your case if you can show a rule that unequivocally states that a short position is considered to be a beneficial ownership. Or just one beneficial ownership statement for any company that reports a short position. <<Sure you have. You've said that they have shorted enough shares so that they can't lose money if Valence fails... this implies a short position of least 1.2 million shares against the A preferred.>> I've never said this Paul. I've simply said it makes sense for them to have hedged their bets, particularly when the price in December was at the $9 to $11 range. There is time for them to increase their short position (and guarantee a profit) if they think the price will go down. Your bottom line is <<Castle Creek invested in Valence because they believe they will be successful.>> This argument totally ignores the fact that floorless conversion deals are arranged for the very reason that the investor does not have confidence that the investment will succeed. That is why the investor structures the deal so that they can profit no matter what happens. If Valence could have gotten a fixed-rate financing (which would demonstrate an investor believes the company will succeed) they would have violated their fidiciary duty to shareholders by not taking it. Because the deal they did take risks unlimited dilution and even NASDAQ delisting (see latest SEC filings).