theStreet.com gets it wrong! <"The way I read it," he says, "is that the capital markets are closed to this concept." ......he believes it'll have to raise more cash, and raise it sooner rather than later. Which brings us back to the capital markets being closed to the concept. Can't raise cash if nobody'll give it to you.> Maybe Globalstar will need more cash [if the rollout is sluggish and overpriced] but if it does, there is heaps of money available. I'll be doubling my stake - assuming the share price drops sufficiently to allow for the slow rollout and excessively high minute prices. I bet there are plenty of other investors who will put money in too.
I'm getting sick of the wise after the fact people who never said boo against Iridium this time last year, or in 1997, or in 1996, but are now all over that, ICO and Globalstar. I suppose they have to write something in their newspapers and stuff, and this sure is a big news items. But they are getting stuff wrong. Not to worry, the very newsworthiness of the satellite sector thanks to Iridium and ICO is going to make for a lot of free publicity for a wildly successful Globalstar [assuming the Service Providers and Globalstar figure out how to sell handsets and minutes].
Since the constellation is pretty much complete, and breakeven wholesale prices are about 10c per minute, the constellation will be fully funded and will succeed. There might be some dilution of existing shareholders if the rollout is slack, but it will definitely be an operating system and commercially successful.
My guess is wildly successful. Globalstar will definitely not be another Iridium or ICO.
Another billion in cash will easily be raised. Not that that much will be needed. Sure, that would drop the share price, but not to wipe-out levels as happened with ICO and Iridium.
Maurice |
