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To: JavaAdict who wrote (352)	6/23/1999 9:48:00 PM
From: Michael T Currie	Respond to of 790

Thanks to CatLady, who steered me to this thread. I posted this on the A@P thread and repeat it here (sorry to those who read both). I believe that GSTRF is a worthy of a look (to buy) both in the short and long terms: GSTRF had a nice rise today. At midafternoon, the news came out that they had finalized their financing to enable them to complete the network. Financing by Bank of America and guaranteed by Loral, no less. I don't know why this isn't on Yahoo news: Globalstar Arranges $500 Million Credit Facility NEW YORK--(BUSINESS WIRE)--June 23, 1999--Globalstar (GSTRF:NASDAQ) announced today that it has arranged a $500 million credit facility for the build-out of the Globalstar system. The facility will be fully underwritten by Bank of America NT&SA. The credit facility is guaranteed by two subsidiaries of Loral Space & Communications (NYSE:LOR), which will pledge certain assets to support the transaction. Loral will receive consideration for its support in the form of equity warrants. The transaction is expected to close in July, subject to certain conditions. "The attainment of this credit facility for Globalstar represents another important vote of confidence from the financial community." stated Bernard L. Schwartz, Globalstar's chairman and chief executive officer. "This credit facility, together with expected vendor financing, completes the funding requirements for the Globalstar project," Mr. Schwartz continued. Including this credit facility, the company has raised $3.8 billion for the development, construction and deployment of the Globalstar system and for operating costs, budgeted debt service, system improvements and the development of new features. "Every element of the program is on track for the initiation of commercial service in September - launches, phone production, gateway deployment, system testing and marketing programs," Mr. Schwartz said. "We've come a long way in eight years and, along with our partners, are confident that we'll meet our business plan milestones." Globalstar expects to commence a regional roll-out of commercial service in September with 32 satellites and nine gateways providing more than ample coverage during the early subscriber acquisition period. By the end of 1999, a total of 48 satellites plus four spares are to be on-orbit and approximately 16 gateways in operation. The 22 remaining gateways are scheduled to come on stream throughout the first several months of 2000. A sufficient number of telephones, manufactured by Ericsson, Qualcomm and Telital, should be in the distribution pipeline in the fourth quarter to satisfy expected demand, with telephone production ramping up to 40,000 units per month by early 2000. The Globalstar system is designed to provide affordable satellite-based digital voice services to a broad range of subscribers and users. Globalstar mobile and fixed-site telephones will meet the needs of cellular users who roam outside of cellular territories, as well as residents of inadequately covered areas who need dependable, basic telephony service. ----------- From an article by Sam Jaffe in Business Week Online: Another edge for Globalstar: It will market its service in a much more low-key manner than Iridium, allowing it to gain market share at a much lower cost. Globalstar also has the ability to service as many as 8 million customers. So if demand is anything like what every market study says it will be, Globalstar will be ready to get it. With only 15% of the earth's surface area covered by cellular service, globe-trotting business travelers say they're desperate for a single phone they can use at any time, in any place. Globalstar's stock is especially cheap right now. If the service is running at full capacity in two years, it could make as much as $12 billion in revenue. At its current price of $17, that would give the company a price-to-sales ratio of 0.1. A comparable cellular company, Sprint PCS (PCS), has a 2001 price-to-sales ratio of 3.9. That's almost 40 times larger for a company that makes much lower profit margins on its revenue than Globalstar should get. Analysts who follow Globalstar rate it a strong buy or buy, and expect it to reach profitability by early 2001. By then, today's stock price could look like a launching pad, rather than a fallen bird. --------------------- I am aware of only three players in the field: GSTRF, IRID (massive problems but may survive with MOT's help), and ICOGF (even more massive problems and not even scheduled to start up until a year later than GSTRF. I am very short on the latter). It appears likely that Globalstar will have wireless, satellite-based mobile telecoms largely to themselves. Peter Drucker once said something to the effect that those who complete the missing link in a chain will win. That is what GSTRF seems bound to do. In my opinion, GSTRF is extremely undervalued. I have no target in mind and have no intention of selling unless they foul up well and truly. Mike