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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 59.96

-4.6%

Dec 29 3:59 PM EST

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To: Andmoreagain who wrote (4096)	4/23/1999 10:59:00 PM
From: CommSatMan	Read Replies (1) of 29987

Andmoreagain, I appreciate your questions. You ask questions from a different perspective and I have always found that to be helpful. Like you, I sold my shares last year. I wish I could say that I was brilliant, but the truth is I had both G* and Iridium and they met my criteria to off-load, so I sold them. They could have just as easily gone the other way. I am now looking to reinvest for the long term. However, based on the problems Iridium has had, I am not inclined to accept the "trust me" we got all the answers. I don't mind accepting risk when I understand the criteria and I am willing to accept the risk associated with the unknown demand for mobile satellite systems. What will drive G* profits is their ability to meet the capacity projections. This will determine the price (just for you Maurice) they can sell minutes and remain profitable. The questions I have relating to capacity keep being answered by the standard company line. It's 12 billion call minutes per year. Has there been any outside audit of their approach? I can understand Loral not wanting to publish the details of their traffic model projections, but has there been an independent audit from a reputable company that says that the numbers look reasonable based on power limitations, demographics, ground station visibility, etc? How many ground stations do they have to have in order to meet this capacity? What is their growth curve? Secondly, the marketing plan. Iridium trusted its Gateway owners and operators to sell its system. They have failed miserably. G* is depending on service providers. What incentive do they have to sell this service? Do they have a cost benefit ratio where it increases their revenues to offer the services? I know they have a stake in the company, but so did Iridium's Gateway owners and it didn't seem to help them much. What steps has G* taken to avoid the same path as Iridium? G* has stated that they have sufficient funds to establish service. Iridium made the same statement. What assumptions is G* making with regard to take-up rate and profit to reach a cash flow break-even point? Cash flow is what killed Iridium. They made some bad predictions along with a bad marketing plan. How is G* going to avoid learning these lessons. Any insight would be greatly appreciated. CSM

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