Tabler, it's true that Globalstar handed the debt over to the guarantors. While that was not the original plan, it was set up in the contract because it was possible. That possibility came up. It's not as good as not needing the loan at all, but it's nice to see that the loan was arranged and guarantors were available.
That bunch of agreements has now been brought into action.
There isn't anything underhand, deadbeat etc about it. It's just risk management, business and calling on business partners to back a debt. The business partners benefit from G! continuing which is why they guaranteed the debt.
You seem to have got the cost of the minutes wrong. It is $1 a minute in Australia, 73c in China, $1.50 [depending on the plan] in USA. Also, you should remember that the wholesale price per minute can be dramatically reduced if necessary to generate business because the capital cost per minute for the assets was about 7c per minute.
If you are basing your short on these 'facts' you have made an incorrect bet and should review the foundations of your bet very quickly.
Geoff Goodfellow, Valueman and others have made good arguments for shorting the stock. You might be right that it's a good short at $9, but not on the facts and reasoning you gave. Being right for the wrong reasons is fine, but a bit on the scary side.
Please don't look on this discussion as an argument, with winners and losers - we all benefit from understanding why people go long or short. The winning and losing will happen in the share price. I can tell you I'm very wary about losing my money so I look constantly for reasons why I might do so. The best place to look is in the arguments of shorts and people such as Geoff, Valueman, Pterodactyl [who swoops down from cyberspace to gloat when things go a bit wrong in the CDMA world].
So far, I'm happy with my investment and think it will succeed. In fact, check out the Independence Day Celebration stream where a huge short squeeze has been announced. There is not even 10 minutes for shorts to cover. The market will open with them staring into the abyss.
Mqurice |
