Thanks Mr A. Now you bring me back to what I originally thought - systems would need to be in balance. You don't want wastefully big photovoltaics, underpowered batteries or circuits sitting dead through lack of electricity [= Juice Mike D and wasn't this an interesting article = www3.techstocks.com ***off topic*** but worth reading].
So there are no surplus batteries, no surplus photovoltaics, no surplus circuits. That means the system is going to be flat out. That means there are no discounts for us here in the deep ocean. That means my original informant two years ago was correct [the designer of the system remember] that the power needs to be saved for the more populated, higher value areas such as Japan, China. Not sold off cheaply to us in New Zealand.
That brings me back to my original premise. The management of price is off-key and there are going to be sinking yachts, calling Mayday into a fully-loaded Globalstar satellite with no spare capacity to handle the call. That means they quietly sink into the ocean and die.
That means Globalstar gets sued for millions if they make false assurance of "call anywhere any time". They must add "If there is space available". In less dramatic circumstances, it still means frustrated callers and shareholders not netting the maximum value of calls because there is no flexibility in price.
Most people will be simply grateful that the profits will be high, as shown below from a Yahoo discussion. I prefer efficiency, customer contentment and maximum profits. The software would not be too difficult and could be done at the gateway - the beauty of having the gizzards on the ground. All it would take is the wit to do it. AND - and this is probably the hard part, agreement from the multitude of service providers who will already have put pen to paper on some sort of agreement on pricing.
But it puzzles me how on earth the available space will be allocated. Will Hyundai be allowed so many minutes in a month for India and that's that? Anymore and they get cut off? Maybe a daily quota? There must be some sort of centrally planned economy 5 year plan system for rationing call space.
Thanks for clearing it up on the power supply.
Maurice
PS: Valueman, you can hardly blame me for another tirade when Mr A. went so far as to write "CURRENT PRICE IS..." I really do have other things in my head - sometimes it's just hard to think what they are.
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From Yahoo:
In the last annual report B. Schwartz projected 2002 revenues for G* at $2.6 billion, after tax profits of $1.8 billion with free cash flow of more than $2 billion and revenue growth continuing at 40%, annually. This projection is based on 3 million subscribers by 2002 (10% of G*'s identified addressable market) and an estimated 19 million subscribers by 2012.
Schwartz based these projections on an average usage rate of 160 minutes per month per subscriber, which he feels is a conservative
estimate.
What does this projection translate to shareholder value, you may ask? Let's assume the P/E ratio in 2002 is 40, equal to the to the projected revenue growth rate. GSTRF shareholders own 29.3% of the total Globalstar L.P.( partnership). There are 30.6 million GSTRF shares outstanding. Therefore projected 2002 share price would be calculated as follows:
EPS * P/E = projected share price
(($1.8 billion * 29.3%) /30.6 million) * 40 = $689 per share
However, a P/E ratio for a hyper growth stock can be much higher. I think the potential of this stock is $1,000 per share in 2002 and up to $6,000 per share by 2012.
Schwartz has not been known to overstate projections in the past merely to hype his company stock. He has a very credible track
record of delivering on and exceeding projections as past CEO of Loral Corp. and current CEO of Loral Space & Communications.
$71 a share? Definitely worth it and much more. Yes there are significant risks and possible near term volatility due to possible technical problems or launch failures which could potentially delay service. However, the current market discount for such risk factors is excessive and this stock is significantly undervalued.
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