Thanks for the added information/correction of the posts I copied over to this thread. I agree wholly with what you say about a real Morgan Stanley target and "buy" rating. Choo-choo!
Here are more Readware posts.
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Subject: Re: readware/2nd generation
Date: Tue, Oct 7, 1997 12:11 AM
From: Readware
Message-id: <19971007001101.UAA02572@ladder01.news.aol.com>
The announcement about the second generation LEOS for G* (in last week's Wall Street Journal) means that G* expects to execed capacity by the year 2005-- that means it will probably have in excess of 5 million subscribers. And yes, if it does exceed 3 million susbscribers, it will go far beyond $500/share. Just do the arithmetic. Will it go far beyond 3 million subscribers is the question-- the announcement last week indicates that
Globalstar definitely believes it will be constrained capacitywise in 2005-- hence the need to start working on a second generation and bringing it Skybridge to help out.
As far as C* goes-- in concert with Skybridge, the C* Skybridge constellation will certainly do in excess of $2 billion by 2004 (this, of course, as always, assumes the three C* GEOs and half of the Skybridge constellation is launched successfully by 2003-- C* by 1999). Broadband revenues are expected in the industry to exceed narrowband by 2005, 2006. That means the C*-Skybridge constellation should exceed G* in revenues sometime in 2006. However,
that is quite far out, and so it cannot be said with any sense of certainty. One certainly wants to be much closer timewise to that year before investment decisions for events of that year are made. The certainty now is that G* is going to collaborate with Skybridge in 2002 for a second generation system for G* and telephony and fax/data for G* customers. My point on wideband, in answer to the question about C*, is simply that it is going to be a
much bigger market than telephony-- as it looks now it should be three times telephony some 8 years from now. I say should be three times the size. Once Skybridge announces the details of its plans by Sept1998 the size of broadband vs narrowband will be far clearer. At that time one can start making more quantifiable judgments.
Subject: Re: Why the action?
Date: Tue, Oct 7, 1997 12:27 AM
From: Readware
Message-id: <19971007002701.UAA09441@ladder02.news.aol.com>
Research, research, research, and more research-- geared more towards the economics/financial side than the engineering. That's all I do-- and it never seems to end.
Subject: Re: Cyberstar
Date: Tue, Oct 7, 1997 12:50 AM
From: Readware
Message-id: <19971007005000.UAA11363@ladder02.news.aol.com>
No, let me be clear: Cyberstar, according to Loral management, should do $886 million in fiscal year 2002. That does not, however, include the collaboration planned with Skybridge. The revenue number could be higher, depending on how LOR management books its revenue collaborations with Skybridge. LOR's 2002 fiscal year net earnings numbers, as published by the company, is expected to be a $4.36/ share.
This always assumes, and this is important for any LOR shareholder, that all the Cyberstar Geostationary satellites have been launched successfully (there will be three launched plus a spare) by 1999, that Skynet's two new Geostationary satellites will be launched successfully by 1999 also, that Globalstar's 48 LEOs are all launched successfully by October 1998.
Loral should be growing in the year 2002 at 30% that year, and for at least two more years after that. You take $4.36/share and multiply it by 30 to get a price of just under $130/share by 2002. However, assuming all of Loral's planned satellites, as announced in their business plan presented to shareholders, are in orbit, it is not foolhardy to suggest a higher than $4.36/share earnings number in the year 2002. If you make just a bit higher
assumption on transponder leasing returns, you can easily get to $4.80-$4.90.
The demand for the satellite services is not the investment risk that Loral shareholders have in Loral-- that demand is very strong. It is, in fact, getting stronger. The risk LOR shareholders have is in a satellite launch failure or the like, which would be a temporary phenomenon. Earnings expectations always have that caveat. The advances in technology, and the software for launches, have greatly diminished launch failures in the past three years--
only Ariane 4 and Navstar in the past seven years were launch failures of any signifigance in a period when over 480 satellites were launched.
A good thing for readers of the LOR post is to get from Loral shareholder department I guess it would be the latest presentation brochure/papers Loral's management gave at the Morgan Stanley conference just last month, and you can see what numbers Loral's business plan offers to shareholders, and where they stand on their business developments. |
