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

To: jim heger who wrote (9851)	3/26/1999 8:34:00 AM
From: Zeev Hed	Read Replies (3) \| Respond to of 27311

Jim, I'll give you two other cases of very illustrious management leading their organizations down the same path, Amdhal, the father of IBM's mainframes and then the founder of Amdhal Computers (taken over by Fujitsu, I believe), went through $200 MM of OPM with Trilogy and folded. Rolwagen of Cray's fame, took a nice smallish PMAT and carried on a disastrous acquisition of Electrotech resulting in the new company (TRKN) being now virtually bankrupt. VLNC has gone through $150 MM of OPM, and so far we have had only hot air to show for it. Yes, these people do sometimes get blinded by their own greatness, when they fail, the failures are monumental. My advice, look at the numbers as well as management and ask yourself can management execute their dream with the resources available? Relying on the "goodness" of the market for future financing is a second major strategic mistake of Berg, IMHO. What if we go into a bear market for equities? You think that the market is going to put a future value on the stock so that a secondary at much higher prices will be feasible? Is it responsible management to plan on a bull market to be there when VLNC finally ships so that financing at "much higher prices" is feasible? Management should not engage in market timing gambles, you and I can do that with our money, management has a fiduciary responsibility to assure survival of the company whatever the financial markets are doing, or I should say, despite what the financial markets are doing. By turning down that initial small order last year (assuming delivery was indeed feasible on a small scale), management missed a golden opportunity to come down their own learning curve. Yes, there are some very illustrious and successful people on the board, but it is up to you and all of us to realistically assess management's actions, and so far, the bating average on the management side is not too high. The best technology is not going to win in the market place without the financial muscles to execute. Zeev