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Technology Stocks : Orbital science (ORB) -- Ignore unavailable to you. Want to Upgrade?

To: wiz who wrote (2160)	7/9/1999 6:44:00 PM
From: Fred Levine	Read Replies (1) \| Respond to of 2394

Mark-- Two reasons: One is that ORB disappointed analysts in the past by accounting practices (hence all the pending suits), and has not YET demonstrated real earnings. IMO, this will indeed happen in the 4th quarter. The other is.. Teledesic, Motorola Agree On Satellite System By Martin Wolk SEATTLE (Reuters) - Teledesic LLC, the planned $9 billion satellite venture backed by billionaires Craig McCaw and Bill Gates, said Friday it reached an agreement confirming Motorola Inc. (NYSE:MOT - news) as its prime contractor. The agreement ends several months of speculation that Motorola, already reeling from financial problems in the Iridium wireless communications system, was backing away from Teledesic, which aims to provide a high-speed, two-way global data network beginning in 2004. The speculation was fueled by Motorola's decision to halt work on Teledesic while the two companies hammered out technical details of the program. ``From the standpoint of both Motorola and Teledesic management, we have been together throughout these months,' Teledesic co-chief executive officer Bill Owens said in an interview. ``There was never a time when we thought we would not be proceeding with Motorola as partners.' Details of the agreement with Motorola, which Owens described as one of the largest fixed-price contracts ever, were not immediately released. Owens said an updated cost projection and other technical details would be released within three months following a joint analysis that must be completed before the deal is final. Teledesic also said it selected Lockheed Martin Inc.'s developmental Proton M and Atlas V heavy-lift rockets to launch a ``significant portion' of Teledesic's planned constellation of several hundred low-Earth orbit satellites. Motorola stock rose $1.875 to close at $99.81 while Lockheed Martin was unchanged at $38 on the New York Stock Exchange. Motorola joined Teledesic last year, pledging $750 million for a 26 percent stake and taking over as prime contractor from Boeing Co., which remains an investor. Owens said Motorola's equity stake has been diluted by subsequent investments in Teledesic, which has raised more than $1.5 billion in private capital. As part of the latest agreement, Motorola made a $150 million cash payment to Teledesic, which in return made a down payment of $250 million for Motorola's work as prime contractor. Analyst Marco Caceres of the Teal Group said Motorola and Teledesic had been at odds not only about the architecture of the system but about the price, which he said was likely to go far higher than $9 billion. ``They have been going back and forth, and finally they've come to some sort of agreement, which is pretty significant,' he said. ``I was concerned Motorola was going to be leaving the program.' He and others said Motorola was skittish after its disastrous investment in Iridium, which has struggled to sign up subscribers and has been unable to pay its debt service. Motorola owns 18 percent of the venture. I think what we're seeing is Motorola hedging its bets a bit,' said Mark Zohar, senior analyst at Forrester Research. 'Teledesic is a completely different model, and probably one that at this point makes more sense.' But he said he had doubts about whether Teledesic could make money in an increasingly competitive market, particulary with an emerging new generation of cheaper wireless technology. Owens of Teledesic said he had no doubts on that score. ``The business plan is so strong and the market is so good out there as we become operational there isn't any question that the prices we are talking about will set us up for a very successful business here,' he said. McCaw, the cellular telephone pioneer, and Gates, chairman of software giant Microsoft Corp. (Nasdaq:MSFT - news), founded Teledesic in 1990 and have drawn funding from corporate and individual investors including Saudi Prince Alwaleed bin Talal. ``If anybody can raise the bilions and billions of dollars that are needed it's Craig McCaw,' said Caceres. I feel that there is plenty of room for both, and in fact, that ORB can get the satellites up cheaper and better, but I'm not sure if they can do it faster. fred