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John Petersen
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John Petersen is a partner in the law firm of Fefer Petersen & Co. and focuses on corporate finance, due diligence, M&A advisory and related consulting services for manufacturers, innovators and investors in the energy storage and renewable energy sectors. From 2003 to 2007 John served... More
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  • Why the PUMA is a Great Idea 5 comments
    Apr 8, 2009 2:22 AM | about stocks: VLNCQ.OB

    This morning I've been reading a rash of reports on the new Personal Urban Mobility and Accessibility vehicle (PUMA) that was unveiled yesterday by GM and Segway. While I'm generally harsh on proposals for vehicles with plugs because I question their fundamental economics, the PUMA looks like it could be a winner. It also looks like it would be a blast to drive.

    My big problem with plug-ins has always been the prospect of using batteries to move a couple hundred pounds of passengers and a couple thousand pounds of vehicle at highway speeds. With a curb weight of 300 pounds and space for two passengers who don't mind close quarters, the PUMA blows the economic arguments out of the water, as would any solution with a passenger to vehicle weight ratio of one.

    I truly hope the PUMA advances rapidly from prototype to product and garners widespread consumer acceptance.

    For several years now, Segway's battery supplier has been Valence Technology (VLNC). They manufacture a high-end Li-ion battery (lithium-iron-phosphate chemistry) that has drawn rave performance reviews from end-users who've commented on my articles. If Segway is as pleased with the Valence batteries as the end-users I hear from, there is no reason to believe that a competitor will be able to undercut a long-standing business relationship and edge Valence to the sidelines.

    If the PUMA is even moderately successful, it could be a company-maker for Valence.

    My personal opinion is that Valence's stock is a bit on the expensive side. With it's history of operating losses and weak financial condition, I have a hard time justifying a market capitalization of $240 million. But on the other hand the reason for investing in technology driven companies is the potential that a single event might move a stock from overvalued to undervalued in the blink of an eye, and even I have to admit that it's a more attractive stock today than it was yesterday.

    I don't own Valence or plan to buy it, but I think the PUMA could prove to be very good news.

    Themes: transportation, alternative energy Stocks: VLNCQ.OB
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  •  
    I own VLNC stocks and let me tell you after knowing a bit of inside information i do not plan to buy anymore, just looking the moment to sale out with no losses.
    9 Apr 2009, 04:21 AM Reply Like
  •  
    Big Valence fan. Think the stock is pretty fairly valued when you consider the competition, where the industry is going, customers using their batteries and thier IP portfolio. Everyone should do their research and make thier own decisions.
    10 Apr 2009, 04:51 PM Reply Like
  •  
    Greetings Advill - can you share with us what you know about new technology or problems with Valence that has you want to sell your VLNC stock?


    On Apr 09 04:21 AM Advill wrote:

    > I own VLNC stocks and let me tell you after knowing a bit of inside
    > information i do not plan to buy anymore, just looking the moment
    > to sale out with no losses.
    10 Apr 2009, 05:00 PM Reply Like
  •  
    John, you may like the PUMA but if you look at the comment section in any newspaper article about the PUMA, you'd find you were in a very small minority.

    Also, there are rumors that Segway is looking for different battery suppliers. I know many Segway owners are not happy whatsoever with the cost and reliability of the Valence batteries. Nearly $2,000 to replace your scooter batteries every couple of years is a bit ridiculous, don't you think? I certainly wouldn't go out and buy Valence stock for the sole reason they were used to power this prototype. First, it will be a long time before it is even decided if the PUMA goes beyond the prototype phase. Second, even if it does, there is no guarantee the PUMA would use Valence batteries.
    10 Apr 2009, 05:05 PM Reply Like
  •  
    I think the biggest perception problem in the EV world is a conviction that EVs are a very expensive downgrade from current automotive technology. Without new ideas that can move EVs into an "I gotta have this technology" class, the market will tend to fight the transition rather than embrace it.
    22 Apr 2009, 06:02 AM Reply Like
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