Zeev's Turnips Patch-No Politics (ZEEV)

[The Realist]

Zeev, more sleuthing. You had Valence on the verge of a death spiral 3 years ago and a few months later they were at $40.00 You said then just as now that VLNC did not have the financial resources to continue. Here we are 3 years later and you're saying the same thing AGAIN. Maybe you and the cheif are on to something?

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=11499969

o:MGV who wrote (15185)
From: Zeev Hed
Sunday, Oct 10, 1999 12:32 PM
View Replies (3) / Respond to of 25684


Mark, what I am saying is very simple, VLNC is fighting for survival. Management believes (and has managed to
persuade others to believe) that they will be shipping "any minute" now, but financially they are essentially
bankrupt, and badly "on the ropes". If the CFO in any given month does not manage to get Daddy Warbuck" to
inject additional funds, they'll have to start and cut into the muscles of their burn rate quite drastically. So far, the
CFO has managed to play the high rope game quite well. Sure it would have been better to go with a secondary
at $7 or higher, but I doubt they had what to go with. They have no choice right now but to access the leaky
floorless. If they get a material order, however, you may very well see an explosion like the one that erupted at
ANCR (another death spiral that was saved in the last minute by a timely massive order from Sun).

What are the odds of VLNC getting such a material order? I know not, right now the stock's trend is down and
thus the market is saying that they are missing what was in essence another self imposed dead line (end of
September, at least that was the general impression from the last CC), after missing the January deadline and the
July deadline. This, to me at least, indicates that the problem is not in getting a P.O. (they must have "potential
P.O.'s lined up since last September according this thread), but the problem is in getting yields that are profitable.
Not having much cash on hand, they cannot afford shipping batteries each wrapped with few dollar bills, so, from
where I sit, this is a more probable reason for the delay. Long term, that might cause them to miss a window of
opportunity if competing entities overseas, with much greater financial resources (and accustomed and financially
capable to operate a plant for a year or so at a loss) get there before them. That would, IMHO, reduce the future
market share that VLNC can hope to capture.

Zeev