I am still astounded that more people did not see the Iridium disaster coming. I was beat up a lot for posting my extremely negative views on Iridium, their service, their technology and their capital structure. The story has unfolded exactly to plan, although I am not sure how it exactly ends. My focus is now on how to play the eventual success of Globalstar. I still beleive that I will be able to buy stock at least 3 or 4 points below the current level (maybe much lower). I would never short a stock that I am basicly (or long term) bullish on. It would kill me to lose money on a short when I like the underlying prospects of the company.
ICO still has a chance to back down and give the investors back their money. My guess is, just like the Iridium management team, if the street will give you the money, ignore the negatives and move forward. Ellipso seems as though they have their angel in Boeing. If one system cancels, that would be a bonus for Globalstar.
I think there will be pre-commercial launch anxiety over the next few months on Globalstar. In addition, unless Motorola, the banks and the bondholders want back zero of their money, they will have to find a per minute price point and handset price that will get them 100,000 new subscribers (I wouldn't bet on it). Anything that they do will be an attack on the coming and pre-marketed Globalstar service. Regardless of a resturctured Iridium's success, any radical shift in their model will be viewed as a new threat. Personally, I think Iridium the service is toast, along with Iridium the company.
Globalstar stock will trade at multiples of today's price 12 to 18 months from now. The entry point is some time over the next 6 months. I think it will be later rather than sooner. |
