Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 60.88

+1.2%

2:27 PM EST

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To: djane who wrote (3405)	3/15/1999 6:56:00 PM
From: djane	Read Replies (3) of 29987

Interesting analysis of G/L discount factors (via g* yahoo thread) Top > Business and Finance > Stocks > Services > Communications Services > GSTRF (Globalstar Telecommun.) Help - Add to My Yahoo! - Sign Out Stock Price Discount Factors? by: AR2BW (50/M/Orlando, FL) 4931 of 4931 It seems to me that the market is discounting two factors in LOR and GSTRF: Launch Deployment and Phone Subscription risks. 1. The Launch deployment discount seems to be proportional to the Prob. of launch success (given about 90% prob of success/launch. This might mean that this discount factor is about (.9)^4 = .65 or so at the moment for this risk. (By the way this means that there appears to be a 65% chance of reaching 32 Sats on orbit with no failures.) 2. The recent IRID(F) market demand issues are raising questions about if enough phone subscribers can be found. Thus another discount of maybe 50% which is constant for now. (unless something happens with IRIDF or GSTRF early handset sales.) Thus the total current expected value discount appears to me to be about .65.5 = .33 right now on both LOR and GSTRF stock value. Given this model I'd expect the stock to raise slightly with each additional launch (k) (i.e. .5(.9)^(4-k)) until late summer when all of the 32 sats are up and only the subscriber risk discount will apply (50%?). This discount will only disappear when subscriber results are known (Dec 99?) and the business breakeven risk is lowered. Given all of this GIGO math, I'd then expect about $25-$30/share by September at the beginning of operations from current levels and $55-$60 by year end. Interesting that I was able to hit the analyst's target price ranges with this argument. Any other opinions? Posted: Mar 15 1999 5:40PM EST as a reply to: Msg 1 by YahooFinance

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