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

To: Larry Brubaker who wrote (11389)	5/26/1999 1:13:00 AM
From: kolo55	Read Replies (3) \| Respond to of 27311

Right on the variable conversion issue timing. From a re-read, you are right on the variable conversion issue. The conversion occurs at the end of July, and if the stock price is over the $6.03 fixed conversion price, then the variable conversion issue disappears. Also apparently right on the IDB funding issue so far. The first batch of laminate apparently won't generate revenues that exceed the IDB threshhold of $4M in revenues from N.I. But the materials appear to be sufficient to make over $15 million dollars worth of batteries (by my calcs... I'm less optimistic than FMK on this). It seems that Hanil is quite serious about the significant investment they are making based on Valence's technology. They must have liked the performance of the battery cells they have seen. Remember, Hanil is putting up all the money for the plant there, and initial costs are probably in the $25-35 million range. If I remember correctly, they put up the first $50M of capital consumed by the JV (including working capital). From my reading on the agreement, they will get to recover their capital invested from the cashflow first, but later Valence will share 50/50 in later capex and cashflow. That is probably the most bullish thing about today's announcement. Once again a knowledgeable professional commercial entity has shown a willingness to put capital to work on Valence's battery ventures, based on their assessment of Valence technology and market conditions etc. They join Castle Creek, Alliant Techsystems, and Delphi Automotive, in putting capital at risk, based on the successful performance of Valence products. It is extremely likely that Hanil knows more about the technology and market, and Valence's competitive situation, than the posters on this (or any) thread. And they are putting their own money to risk in a fairly big way, expecting to make money manufacturing the Valence products. I don't think the market really understood the importance of the announcement today. Paul