Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 68.31

+4.9%

3:59 PM EST

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To: LLCF who wrote (6769)	8/23/1999 11:46:00 PM
From: John Stichnoth	Read Replies (1) of 29987

You're welcome. I'd point out on irid, however, a basic difference--Hotels have real value, in liquidation, and a very long depreciation period. Irid assets appear to have little or no intrinsic value. The principal assets are the sats sitting up in the sky. If they cannot generate revenue, they have no value. And they have a limited period in which to generate a positive revenue stream. The sats won't last more than another couple of years before some start to fail and serious holes start to appear in their constellation. And, they'll have to go a long way past ebitda breakeven to justify the cost of putting up replacement satellites. The key to minutes, for irid and G*, is of course user terminals (handsets and fixed). And this is a key problem for irid. Who is going to buy a handset--for $1,500--for a service that likely won't last a year? (I wonder if there are enough handsets even available to reach breakeven? And what kind of resources will MOT and Kyocera put into producing more handsets for problematic sales?) The Chapt 11 filing is probably a prelude, I think, to converting all of the existing debt to equity (my guess is something like 60% ownership to the bondholders), and reworking the MOT maintenance contract to a much lower level. I do not see it changing hands, because of the need to have MOT maintain the system.

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