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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 60.15

-1.0%

3:59 PM EST

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To: Maurice Winn who wrote (9229)	1/5/2000 9:40:00 AM
From: tero kuittinen	Read Replies (3) of 29987

That was visionary, Maurice. And there's no doubt that this reasoning works for many investors. But what you're not addressing is the gap between what has been projected/promised and what is being delivered. It's not long since the whole Globalstar premise was to be considerably cheaper than Iridium. That's out the window. Globalstar was also billed as a truly international service spanning the globe. The new spin: Localstar. Globalstar phones were advertized as highly advanced marvels of modern technology. What they're actually selling now is dualmode phones with separate numbers for satellite and terrestrial services. The launch slippage caused G to miss the transient Y2K boom for satellite phones - Iridium and Inmarsat mopped up that December spike. This is what I mean by solipsism: you are not comparing what the company is delivering with what it was expected to deliver just six months ago. You are focusing exclusively on future prospects and not looking at what is happening to the earlier promises and expectations. The product now on sale is not the product that was anticipated. And if you shift your focus constantly farther and farther into the future - anything is possible. Sure - the second generation of phones may be a lot better. Sure - the new generation of satellites may offer far better mobile data features. Is this really a substitute for showing some competence right now? And I can cite several articles from last summer specifically mentioning far lower prices for Globalstar than we're now seeing. They got those estimates from somewhere and they were not corrected by the management. Here's where falsibiality comes in. Did the management know what it was doíng when it floated the "40 000 subs by end of 1999 - 1 million subs by end of 2000" projection? Were the early launch dates realistic? Was it smart to specifically promise substantially lower prices than Iridium when this couldn't be delivered? Are we seeing the "strong operator support" that was promised? If none of this has worked out the way most investors expected - what is the probability that the 160 minutes per month will materialize? Iridium is evidently delivering only a fraction of that amount of billable minutes. Are Globalstar subs going to use four times as many minutes as Iridium customers? Why? Yes - I've heard the "jungle phonebooth" theory. And I don't think it will salvage the company if the handset angle doesn't pan out. There are mobile telecom plays out there that are relying on markets that we know will explode: mobile positioning systems for terrestrial networks, billing software for mobile data solutions, etc. And they aren't buried in hype the way Globalstar is. That's why I think the G should be a lot more careful in what it promises about a market that may be marginal at best. I know you want to believe that Iridium proved nothing about the satellite phone market. But the early mobile phones took off in a big way despite the fact that they had a crappy quality by modern standards. The demand was there, so even sub-par quality was enough. Thinking that Iridium does not reflect the demand for satellite phones is an act of faith. Tero

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