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Technology Stocks : GX Investors Thread

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To: Paul Kern who wrote (552)	2/23/2002 7:50:00 PM
From: Maurice Winn	Read Replies (1) of 586

Globalstar is thinking of including existing shareholders in a rights offering at some price and I like that idea. The reason I like that idea is because it is a LOT easier to sell something to people who are already on-board than people who have been unceremoniously tossed over-board. Even if it's only a mark of respect and appreciation for past services rendered, it's better than nothing. Because it is essential to raise money for both Globalstar and Global Crossing, the more people who are attracted to the new offerings, the better. I expect that to get the existing shareholders to put more money in, some little extra incentive would be needed. Also, it will be cheaper to sell it to them that to new investors [since they have already done the hard yards of working out the opportunity] so it makes sense to pass on some of the cost savings from a new share issue. But the amount existing shareholders would get would be tiny and at the determination of the creditors. So, I think it is probably better to buy the debt and become a creditor than to buy the shares and throw yourself on the mercy of the creditors [who can be quite merciless and stupid too]. However, the current offer from Hutchison is a supersonic bargain for some great assets. So, the shareholders are going to lose their assets at a firesale price. It seems sensible to defend those assets by chucking out the useless managers, who I have not seen anything good about [not that I've seen much at all, but it seems to be that they are not totally at arm's length from the Hutchison offer] and putting up new money and trying to negotiate a better deal with creditors. But I like the offer Hutchison has made - it beats anything else I've seen for my debt. 3c or 4c for my debt seems pathetic! Mqurice

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