Globalstar shares rise on positive online report
NEW YORK, Aug 6 (Reuters) - Shares of satellite communications company Globalstar Telecommunications Ltd. <GSTRF.O> jumped more than 11 percent on Friday after an online technology newsletter made positive comments about the company and Globalstar announced the completion of a $500 million credit facility.
Globalstar shares hit an intraday high of $30.375 but later settled at $27.25, up $2.69, on the Nasdaq stock market. More then 4.9 million shares had changed hands, about four times the average daily volume.
Shares of Loral Space & Communications Ltd. <LOR.N>, Globalstar's founding partner and major stakeholder, were up $1.375 to $18.95 on the New York Stock Exchange.
Analysts attributed much of Globalstar's gains to a bullish report by an online newsletter, the Gilder Report, which can be found at gildertech.com.
"If, through the magic of the Internet (or a courier on a camel), you can manage the purchase of the shares of Globalstar or Loral within the next month or so, you may well be in a position to make a killing over the next five years," the newsletter said, according to analysts who said they had read it.
"It rehashed a lot of the points the Street has been saying, outlining its advantages over Iridium...it's not a lot of new information but (the newsletter) has quite a following," said Lehman Brothers analyst John Bensche.
Globalstar plans to provide phone service through a network of 48 satellites. It may have some advantages over rival Iridium World Communications Ltd. <IRID.O>, which has suffered from debt woes, slow subscriber growth, and marketing and sales missteps.
Analysts said Globalstar's lower cost structure and more competitive pricing may help it succeed in areas where Iridium has struggled.
Globalstar said it had completed a previously announced $500 million credit facility with a group of banks, led by Bank of America, for the build-out of its satellite system. The pact provides for a $100 million three-year revolving credit facility, a $100 million three-year term loan, and a $300 million four-year term loan.
14:12 08-06-99
(little note: GSTRF closed at 27 11/16, up 3 1/8 [+12.72%]; IRID closed @ 6 1/8, up 5/32 [+2.62%]) |
