Uncle Ver Name, <I guess the silver lining is that instead of 97M shares, GlobalStar has 127M, so therefore at $8.5 it is really valued in the marketplace at 1.08B.
...Twisted in the tendrils of mathematics>
Good point! But keep in mind that nobody had calculated the $1.08bn figure. Neither the shorts nor the longs value it like that. Okay, maybe there is somebody with spread sheets and a very, very strict attitude to valuation who includes such figuring, but I doubt it.
The shorts think like this: "Heck, the bonds are valued at 28c in the dollar, which means this dog is going bust! Sure enough, those stupid huge handsets with flat batteries which cost a fortune, with the high-priced minutes won't sell to your average kangaroo in the outback or polar bear on the Arctic tundra and there aren't many humans out that way either. Iridium failed and it was a much smarter system than Globalstar, with real worldwide coverage. ICO went bust too. Anywhere there are people, there are cool cellphones with cheap minutes by the bucketful. The rumours are that handsets and minutes aren't selling - the company is scared witless of divulging sales figures. WSJ and all the analysts are giving it the thumbs down. George Gilder [GG] blew it on this one and admitted that it's the technology he likes, not necessarily the company or the share price at any particular time. Obviously the best thing to do is short GSTRF and buy the bonds, picking it up for a song at bankruptcy and then discounting the minutes hugely!"
That's how the intelligent shorts think.
Then there are the self-deceiving longs like Geoff Goodfellow [another GG] who get in the long closet, in denial of their short stature, but subconsciously realizing after a great deal of research, attending trade shows etc that Globalstar will succeed. Question: Do people with initials GG especially like Globalstar because of their initials? Does George Gotch like Globalstar too? <gg>
The short-sighted shorts simply think bonds at 28c is good enough evidence of a company on the way out.
Good point though - we are already diluted!
With such demand for G! stock to short, it's not surprising that the GGMDM failed on takeoff [though at the time of the WSJ.com promotion of dehypothecation there was quite a little spike].
Maybe it's time for another short squeeze.
The market is more primed with 30m shares short.
Maurice
PS: Yes Uncle, I realize you are really an Aunt. |
