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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: KyrosL who wrote (23323)9/30/2000 10:44:52 PM
From: Earlie  Read Replies (1) of 436258
 
KyrosL:

I hate to be picky, but to quote your post,...... "I think that in the event of bankruptcy....."

In the event of bankruptcy, the debt holders will inevitably be awarded virtually ALL of a newly issued stock that will replace the old stock (happens nearly every time). In that case, a short like me will make a nice 100% profit (actually it is usually higher than 100%, but let's not get into how that occurs) while the common shareholders will get diddly squat.

Arguing that it will survive bankruptcy after a bankruptcy procedure (shedding the debt) sound like what I hear every day from N.Y.-based analysts.

Again, now being picky, who cares about the capacity when the number of subscribers at hand (and probable) is minute? Iridium never achieved enough revs to pay the electricity bill and I would love to hear your arguments about where the many required subscribers for Globalstar will come from.

I loved your comments about Globalstar's ability to discount its price when it is "unburdened" of its debt. Before that can occur, the company will have to unburden its common shareholders of any ownership in the company, cause in a bankruptcy procedure, the debtholders get everything and the shareholders end up with nothing but a big tax loss carry forward.

All the forecasts have zero validity until the debt disappears, which can only occur if the current shareholders are cremated. Your arguments are based on the convenience of omitting the ugly results of a bankruptcy procedure, which is inevitable.

Best, Earlie
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