I e-mailed this to Carrie Lee at the Wall Street Journal. Her e-mail address was at the bottom of the article.
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It seems obvious from your article that you have not read much of Maurice Winn's writings. While it would take Evelyn Wood (of speed reading fame) a few weeks of doing nothing else to read everything he has posted on Silicon Investor over the years (the man is nothing if not prolific!) it might be an instructive exercise.
In the three years or so that I've known Maurice via Silicon Investor, I have always counted him among the few must-reads on whatever topic he has chosen to write. He is always interesting, which even the few posts on the Great Globalstar Memorial Day Massacre should prove.
I am not qualified to comment on the legality of his proposing the Great Globalstar Memorial Day Massacre, although I cannot see how it could be illegal to suggest people move their stock from a margin account to a cash account, but I believe I do understand the frustration that brought forth this idea. I know that Maurice is one of "True Believers" in what Globalstar is attempting to accomplish, even if he and I and many of our friends are
less than satisfied with much of what the company has done -- or not done -- and even more disatisfied in how Globalstar has been jerked around by people with private agendas. Hard to believe, but some of this has been seen in your fine publication.
This has been possible, because unfortunately, while Globalstar has been focusing on the "hard" stuff of getting the satellites up and the gateways built, they have allowed their service providers, who are all limited partners in Globalstar and are the ones actually responsible for selling Globalstar services, to neglect the "easy" stuff like public relations, sales, and marketing. Why, for instance, are they only now making it possible to use the same phone number for cellular and satellite calls? Why weren't the roaming arrangements in place a long time ago? Why doesn't the phone handoff transparently from satellite to cellular to satellite?
Additionally, nobody, including Globalstar, has been successful in getting the message out that Glolbalstar is not Iridium. (ICO either, for that matter.) Globalstar's business plan is based on entirely different assumptions and goals.
Put simply, unlike Iridium which was designed to bypass the existing infrastructure, Globalstar enhances the functionality of the existing cellular networks. Globalstar fills in the swiss cheese cellular holes in the developed countries (I lose service between my house in Montgomery County and my office twenty miles away in Chester County) and brings reasonably affordable service to parts of the world where wired and conventional wireless telephone service has never existed. And probably never will.
Some of that is around here, but more of it is over there. Places like Australia, South America, Africa, India, and China, to mention a few, have huge areas that have significant populations but will never be able to afford wired infrastructure for any but a few in the large cities. Cellular networks are economically viable in more areas, because their infrastructure costs are lower, but as population density drops even those systems do not make sense. Globalstar, on the other hand, will be putting solar powered pay phones in African and Indian villages where until now nobody had ever seen a telephone, much less made a call on one. What an opportunity!
Think too of this: Globalstar has built a world wide telephone network for less than several telecom companies each paid are paying for additional telecom spectrum for England. Unlike Motorola's failed Iridium project, the Globalstar technology (supplied by Qualcomm) actually works really well. Maurice know this, because he has used both. The Gateways are coming on line, and as they do service is becoming available in more and more places. I believe service is currently available in about forty countries. While the system was designed and optimized for voice, Globalstar will be adding data capability later this year.
And, Globalstar only needs one million users to be profitable. Not one million Americans or Canadians or Germans or Italians. One million people in the entire world.
Yes, the Globalstar phones are too big (smaller phones are on the way), too expensive (prices are dropping,) and have fewer bells and whistles than the latest cellular phones. But, if you are fifty miles from nowhere, your Ericsson or Nokia cellular phone is a paperweight. Under those conditions, Globalstar is your only choice at any price now and for a long time. And when you take your Globalstar phone to the city, it will work on the local cellular system at regular cellular rates.
It is a pretty good story, even if the timeline has gotten stretched out and the financials are not as pretty just yet as anyone would like. Maurice and I believe in this story, which brings us to the shorts.
We believe that there are people and organizations out there that have been taking advantage of the lack of general understanding about Globalstar to make serious money shorting the stock, GSTRF. What Maurice has proposed is that we take our shares and put them in a cash account where the shorts cannot borrow them rather than a margin account. If enough people do that, we believe it will take some of the artificial downward pressure off the stock. If some of the shorts get squeezed, they can't say they did not know this is a risky business.
Admittedly, Maurice likes to hear himself talk, and this has been a pretty good rant, even for him. But I believe he has made more people think about some pretty important issues in the last few days and has gotten some publicity for Globalstar. I'm proud of my friend.
But if you really want to know how he thinks, ask him what he believes Globalstar should be doing in the pricing department. That is a very fine rant indeed!
Sincerely,
Andrew G. Williams
(PS. If you choose to print this letter, please do not print my employer-supplied e-mail address. Thanks.) |
