Globalstar Shares Fall 11% on Delays in Handset Production
New York, Oct. 26 (Bloomberg) -- Shares of Globalstar Telecommunications Ltd. fell 11 percent after the
satellite- telephone company said it won't have as many phones at the end of the year as it first projected,
casting doubt on subscribership.
Globalstar shares fell 2 9/16 to 21 3/4. They've risen 8 percent this year, while the C.E. Unterberg Index of
22 satellite companies has risen 41 percent.
Globalstar said it expects to have 35,000 to 50,000 handsets by year end, less than the 100,000 it first
expected, analysts said. The problem mirrors a difficulty experienced by Iridium LLC, now under Chapter
11 bankruptcy protection, which also couldn't get a timely supply of its phones.
Another satellite-phone company, ICO Global Communications Ltd., also has filed for bankruptcy
protection.
``Due to the reliance on Globalstar's handset manufacturers...we are reducing our year-end 2000
subscriber forecast from 950,000 to 570,000,' Morgan Stanley analyst Marc Nabi wrote in a research
report.
Globalstar's suppliers include San Diego-based Qualcomm Inc. and Ericcson AB of Stockholm.
Nabi, who rates the stock ``outperform,' also lowered his 2000 price target to $30 from $37.
Globalstar will need 1 million customers by the end of 2000 to break even, Chairman and Chief Executive
Bernard Schwartz said on a conference call.
Oct/26/1999 18:03
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