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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT
GSAT 50.53+4.7%Nov 7 9:30 AM EST
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To: Maurice Winn who started this subject10/6/2000 1:51:58 PM
From: Rocket Scientist  Read Replies (4) of 29986
 
A note on Tranche size and timing:

Under the terms of the BS agreement, Globalstar can takedown a tranche every second business day, in volumes not to exceed (among other things) "10% of the total trading volume ...during the two Business Days preceding the Notice date"

The last four tranches were all for the maximum volume permitted under this formula, and the last three were all taken down on exactly the second business day following the prior tranche. In other words G* is selling stock, literally, as fast as it can. If this pattern continues, we'll see next week a filing that the sixth tranche was taken down yesterday, in a volume of about 480K shares.

So what can we conclude from this activity? It's easy to sympathize with M1's argument that "BLS' dumping of
endless amounts of shares into the market just before 3Q numbers isn't a good sign," however:

management's job is to preserve the company's liquidity, not to game the stock market. Who knows how the market will react to Q3's numbers? Market participants have vastly different views on what would constitute "good news." External events affecting the market as a whole are pretty random, too, whatever traders may feel. So, I expect the company will keep selling as fast as permitted under the agreement...and that's probably the correct thing for it to do.
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