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Technology Stocks : Loral Space & Communications
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To: Rocket Scientist who wrote (6023)5/5/1999 12:39:00 PM
From: JMD  Read Replies (1) of 10852
 
Well folks, just to add to the gloom and doom, here's my take and it's not even close to rocket science. The Net Present Value of a future earnings stream depends on the discount factor, which is directly related to the probability of that earnings stream materializing, or not. Human beings that are not economists cut through that bloated explanation by simply asking: how risky is this puppy?
It ain't just insurance premiums that will be going up (eye-popping though I am sure they will be). At the end of the day, insurance premiums will just add a little to the cost of doing biz in the rocket/satellite biz. A few million here and there, but not material in the greater, celestial scheme of things.
What ain't immaterial is the discount factor which will get affixed to the price of your LOR shares and mine for god knows how long. Now follow the bouncing ball: if you divide any given number by a larger number you get a smaller number. And if you divide it by an even larger number you get an even smaller number. And . . .well I'm sure the brains on this thread have grasped the essential principle.
The industry's inability to provide reliable launch vehicles has just created A VERY LARGE FRIGGING NUMBER. Now divide by the price of I*, G*, LOR, SPOT,etc. common and tell me what you came up with.
I thought so. Shit. Mike Doyle
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