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

To: P. Ramamoorthy who wrote (10546)	4/20/1999 12:44:00 PM
From: FMK	Read Replies (2) \| Respond to of 27311

Ram, good points- here are some comments 1-Without contracts, the production capacity at least gives us something to base calculations on. The underlying assumption is that they wouldn't be starting up the plant if they didn't have a market for the product. 2-PO news will come in different forms. 3-I was using 30% margin, not 50% margin and used a fraction of the expected overall capacity. 6 production lines x 3 shifts is 18 shifts per day. I used an example of 1 shift each for 3 lines or 1/6 the expected max production for six lines. 4-I didn't mention licensing in my last post, although the announcement of a license agreement with Sony or Matsushita or Mitsubishi or Sanyo or any other large battery producer for the phosphate or manganese oxide technology should have an impact on the stock price long before revenues come in. However, subtantial fees could be paid up front for the rights. 5-If a company or its production is growing at a fast rate, its multiples usually exceed the industry average, as do many internet stocks. 6-I have usually used a pe of 20 or 25. I could have phrased may statement::"...1 shift per day on three "lines" could very well earn over $1.25 per share. A PE multiple of 25 would then indicate a $31 share price..." It would be interesting to see what assumptions and calculations Don Wolanchuk used to arrive at his $60 to $100 share price! Regards, FMK