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

To: Zeev Hed who wrote (9631)	3/21/1999 12:11:00 PM
From: Larry Brubaker	Read Replies (1) \| Respond to of 27311

Zeev, I don't think the 4.9% statement in the S-3 means that Castle Creek holds 4.9% of the common. What it says is something like they cannot convert preferred shares if it would result in them holding more than 4.9% of the common stock. I have a couple of ideas of what this might mean. 1. If all preferreds were converted and all warrants exercised, Castle Creek would hold more than 10% of the common. But any particular investor in the Castle Creek "fund" may not. This may mean that no particular individual who ponied up funds for this deal may hold more than 4.9%. 2. It may mean that Castle Creek has to sell common shares if they convert a sufficient number of preferred shares (and/or exercise warrants) sufficient to otherwise go over the 4.9% limitation. 3. It may be an attempt at some sort of end run around filing requirements as Paul suggested.

To: Zeev Hed who wrote (9631)	3/21/1999 1:08:00 PM
From: gvander	Read Replies (1) \| Respond to of 27311

This industry is beginning to become fundementally unattractive. Inherent profitability to a great extent is dependent on industry structure. The lithium polymer industry stucture is deteriorating. Whether a company does well is dependant on how much value the product offers and the Company's industry structure. In this case, the product was at one time a significant improvement over existing NMH NICAD and LI-ION. Howerver that has changed drastically. Let's assume LI-polymer can still add at least some value. Then the analysis must turn to who caputres that value? This then depends on the structure of the industry. Here the situation just gets worse. There are many new entrants and more expected by the end of the year. Thus value will have to be shared with them. There are also many new substitute products placing a ceiling on pricing and thus the ability of participants to captuer the now very marginal improvements if any that their products offer. Don't forget the relative power of buyers and vendors in this industry. The buyers, as everyone in the industry knows, have emmense bargaining power and use it to extract as much value as possible from participants. Also suppliers are consolidating and thus will be extracting what value is remaining on the front end. I dont even have to mention the degree of competition within the industry. The fierce compitition and riverly between LI-Polymer companies is intense to say the least. Stories of sabbotage have even ciculated. It seems clear at this stage their is no value to be extracted with the industry structured as it is. Overcapacity and over competition will dominate. I am changing my statement from 3 years ago from "this industry is fundementally attractive" to this industry was. Until the industry dynamics change dramatically I think the pressure within the industry will wipe out many of the companies talked about as leaders today. Strategic reserves will become slightly more relevant. The timing and deployment of them will become paramount. As I have said many times--the are many new technologies comming. Some we have already seen some we haven't but one thing is clear this is just the tip of the Iceberg. Look at just some of what we have seen: Message 6576692 Message 7839353 Just my opinion.