KSA.V new article here.
investorlinks.com
Playing KSAT Satellites as a Pre-IPO
The Lodge Letter, by Richard Lodge
Exclusive to Investorlinks, February 7, 2001
There is a small Canadian company, KSAT Satellite Networks
(KSA, Chart, Boards) that is 74-percent owned, and equally
split, by two much larger companies: Gilat Satellite (GILTF,
Chart, Boards) and Singapore-based, multi-billion asseted
Keppel, which owns a 37-percent share through its Global
Space subsidiary. Dr. Steve Wan, who founded Xenexi
Telecom, upon which KSAT is based, owns a 19-percent
stake. The company, which has privately been furrowing
Chinese territory since 1994, may have made great strides
late last year and set the stage for a spectacular 2001.
Through the 1990s, KSAT Satellite Networks developed a
niche market in China with Gilat's VSAT satellite technology.
VSAT technology, an acronym for very small aperture terminal,
is a technology that uses fixed satellite antennae to provide
reliable communications between a central hub and a wide
range, wide in both quantity and geography, of sites. In this
case, it would be to provide broadband Internet service to
millions of Chinese in between nine and twelve different regions.
The opportunities are overwhelming - especially when KSAT/Gilat plan on piggybacking the widely followed StarBand [proposed
NASDAQ symbol STRB] for a rollout throughout China. Microsoft (MSFT, Chart, Boards) and EchoStar (DISH, Chart, Boards) hold $50
million stakes in StarBand, which is being underwritten by Merrill Lynch and other blue-chip brokerage firms. The concept behind
StarBand, also known as Gilat-to-Home, is to expand from private data networks with limited sites to IP-based broadband Internet
services for millions.
Logical spells out that when StarBand goes public, perhaps this spring, KSAT may be gearing up to follow suit or be acquired, itself, by
Gilat or Keppel. That concept is not far fetched. Less than two weeks before StarBand's IPO filing, KSAT and Gilat entered into a binding
Memorandum of Understanding that Gilat-to-Home China has two initial founding venture partners in Gilat and KSAT. Gilat plans to
rollout in Brazil and China after their U.S. launch. Following that contract Keppel and Gilat invested
US$10 million into KSAT to upgrade existing VSAT systems for the Gilat-to-Home concept.
The big news is that the Chinese government has been cooperating to the extent that, according to the
Chinese state-run news agency Xinhua News, the Chinese government earmarked millions of dollars
to improve its Internet services with Gilat Satellite's communications technology with the first VSAT
application to launch in Shanghai. The plan is to quickly move China into Broadband Internet, because
of the communications infrastructure obstacles that country faces and make those services available
to millions of consumers and businesses in the shortest time possible.
That makes KSAT Satellite Technology a very strong comer in the weeks and months ahead. In a
widely followed Canadian investment newspaper, Investor's Digest, which featured KSAT, a price
target of $2.50 was seen within the next six months. A leading Canadian brokerage house, Canaccord
Capital, placed KSAT Satellite Technology on a short list of Buy ratings for CDNX-listed high technology and industrial companies.
There are many similarities between KSAT Satellite Technology and another small company we followed two years ago. It was called
Infowave Software and its stock ran from $1 to a peak, about one year later, above $60/share. Not that it is guaranteed that KSAT would
jump by 6000 percent in less than a year, but it certainly has the makings for a very strong move within the next 30-45 days.
Copyright © 2000 by The Lodge Letter, Inc. The Lodge Letters succeeds with both fundamental and technical research of small cap
stocks with low downside risk. This is not a solicitation or offer to buy or sell securities mentioned herein. No recommendations are
made to buy or sell the securities mentioned herein. Trading in securities may not be suitable for all individuals and involves the risk of
all or part of your investment. The Lodge Letter specializes in speculative issues, which should only be considered by sophisticated
investors who can afford the inherent risk. Consult your broker or other professional to determine your suitability. Information included
in this article, while considered to be accurate and reliable, must be considered incomplete by the very nature of space limitations in
such an article.
Go back to the top of this page? Click here.
Disclaimer: The advice given above is of a general nature and should not be taken as a recommendation to buy or sell a referenced
security. The information is for informative purposes only and in no event should be construed as a representation by this website or as
an offer to sell or solicitation of an offer to buy or sell any securities, nor is it a recommendation of any specific website or financial
advisory service. |
