AFSCME 3357-HOF'S BLOG

Valance Technology
Can't Miss Technology - Can Miss Investment

I've been keeping an eye on Valance Technology, a company that trades on the NASDAQ market as VLNC. Valance's claim to fame is a battery technology that supposedly makes lithium batteries safer. This is exactly what hybrid vehicles need, a high density, relatively low-weight battery that does NOT catch on fire easily. Can't miss? right?

Well, based on the 5 year performance of Valance, maybe you can miss. Five years ago, Valance was trading at around $5.00 per share. Now it is trading at under $2.00 per share. So if you would have bought the stock five years ago, you would have lost over half your investment.

The moral to the story: beware of story stocks. It's not enough to have a hot product, you have to be able to deliver the hot product at a price and in a quantity that the market demands and at which you can make a profit. It wouldn't hurt if you can do it better than everybody else.

There are competitors in the advanced battery market. It's too early to determine which technology will win out.