Thanks for web url reference to Bernard Schwartz's speech, Rocket Scientist. It gives an Alice in Wonderland quality to the present share price activity of Loral, especially when viewed against that of the internet stocks.
More to the point, when Old Loral in 1996 became Loral Space and Communications, it had no satellites, $700 million in cash, and was only part owner of SSL.
At that time Globalstar had seven employees, and not even one LEO satellite had been built.
The April 1996 price is the price Loral is today. It is as if nothing has occurred over the three years, nothing...
It is as if time has stopped.
I spoke to a New York brokerage firm analyst yesterday, a brokerage firm we give substantial commissions to, and asked him why he did not re-recommend Loral at this time. "Everyone knows Loral is down because of Iridium" was his reply."
How does that answer my question?
Today I spoke to an Iridium executive in Washington about their lead brokerage analyst. He recommended the stock of Iridium at $55/share pre-split. He all but said four days ago to sell it. "Think of all the banking business you gave his firm" I said. "And look at how you have been repaid..."
I received a note from someone on this SI board (I did not know you could get responses in an email format to opinions you express here) that some analyst whom he could not mention did not think there was sufficient business for satellite mobile telephony systems.
The analyst has never been in a satellite manufacturing firm, and has never attempted to sell a satellite service. Investors should listen to him? I would not have a problem saying no one should listen to me on satellites either, since I have never worked in the industry. But then again I don't make the kind of caterorical statements our analyts friend made.
What does amaze me is the almost microscopic view so many on Wall Street take of every move a satellite company makes. Meanwhile on today's front page of the Wall Street Journal is an article stating America On Line may have to take a $9.4 billion charge against earnings for its Netscape-SunMicro venture.
AOL stock closed up today $2.
If a report came out saying Loral would have to take just a $30 million charge against earnings for a misdirected antenna on one of its manufactured satellite (even though insured for such an eventuality), the share price would drop $1. It did in fact do just that once when an analyst at Iridium's lead brokerage firm said this would be the case with a Loral built GEOsat last year. His information was wrong. He corrected himself some three hours later or so. Was the investor who sold based on the inaccurate information compensated, made whole, for his loss? Of course not.
Then you read in the past week non brokerage reports on how Air Touch views Globalstar. There is demand, there is a market, Air Touch offices around the world continue to express strong interest in the Globalstar system. Nothing has changed since Air Touch invested in 5% of Globalstar.
Valueman published notes from a brokerage firm on the current situation at the telcos for Globalstar. Certainly upbeat. The information we have received is similar.
So is it whom you choose to believe that makes the stock price move?
Getting back to Iridium, for a moment. They will have a conference call April 26th. Will we hear about various corporations signing up for Iridium? Will we hear progress reports from Sprint? Will we hear about new DoD (those at the Communications and Computer Systems Directorate [J6]) signatories to the Iridium system? Will we hear that Motorola will not restructure Iridium, that the shareholder will not be laid low under the feet of Iridium's lenders?
Next week there is another satellite conference in New York. (Seems they shouldn't be held since after each one the satellite stocks go down in price). It will be interesting to see if everyone is there with their sharpened pencils and lined pads, waiting to ask questions the answers to which they do not believe, while the internet stocks continue to go up in price on any news because "only a good headline matters" as Walter Lipmann once said.
|
