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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT
GSAT 64.34+7.4%Nov 12 3:59 PM EST
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To: SKIP PAUL who wrote (6157)7/27/1999 12:01:00 PM
From: Rocket Scientist  Read Replies (1) of 29987
 
Whether 4.7X sales is expensive, or not, depends on the confidence one has in the business plan, which calls, in round numbers, for 1M net adds per year. Mgmt has said they reach cash breakeven with 0.55M subs, EPS breakeven, after depreciation, at 1M subs. Capacity is about 7M subs. Each million subs over the first million is probably worth about 2-3$/share, pre tax.

One can do a DCF analysis using numbers like the above and adjust the discount rate to suit the perceived risk. At a 20% discount rate, NPV of the stock is about 40$, IMO.
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