Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: SKIP PAUL who wrote (6157)	7/27/1999 12:01:00 PM
From: Rocket Scientist	Read Replies (1) \| Respond to of 29987

Whether 4.7X sales is expensive, or not, depends on the confidence one has in the business plan, which calls, in round numbers, for 1M net adds per year. Mgmt has said they reach cash breakeven with 0.55M subs, EPS breakeven, after depreciation, at 1M subs. Capacity is about 7M subs. Each million subs over the first million is probably worth about 2-3$/share, pre tax. One can do a DCF analysis using numbers like the above and adjust the discount rate to suit the perceived risk. At a 20% discount rate, NPV of the stock is about 40$, IMO.

To: SKIP PAUL who wrote (6157)	7/27/1999 2:33:00 PM
From: Rajala	Read Replies (3) \| Respond to of 29987

>That still puts the enterprise value at $6.6 billion >and 4.7x sales assuming they reach 1 million customers >using 4 billion minutes after the first year of operation. >This stock is not cheap! especially considering that sales >targets appear optimistic. ¨ Quite right, Skip. These figures are very difficult to believe in. The predicted 1M subs is 66 times Iridium's gains so far. Quite an improvement on the performance of the good old I* I would say. Also the predicted daily usage appears to be somewhat garbage. As the 1 M subs are probably joining in gradually – as versus everybody signing in the first day – it means that the actual average projected daily usage is 22 min. In reality, during a vast majority of the days the average usage will be a big fat zero. Only when needed, i.e. visiting the granma in Boise, Idaho for the Thanksgiving the 20 min average daily is going to be reached. As for the public phones in the most desolate of the Chinese villages, forget it. If you have seen one of these places you quickly realize that these guys are not going to blow their monthly pay on a single phone call lasting 90 secs. - rajala