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

To: The_Guru_00 who wrote (6875)	8/26/1999 11:51:00 AM
From: John Stichnoth	Read Replies (1) \| Respond to of 29987

Maurice may have gone out for a Foster's, after his busy day (night? Summer? Winter?). On your question on this being a handset business, I would expect something like the following: 1. All debt is converted to equity. 2. MOT's maintenance contract is rewritten to just cover its costs going forward, with little (no?) room for meaningful profits for them on that side. 3. Regardless of debt level, irid won't make money for its holders in anything close to a material way. (This is the point, I take it where you see some hope. I don't. The benefit for the holders in a restructuring and continued operation is to defer writedowns. No more. They can't get to the next generation. They won't be able to justify launching more sats.) 4. As long as irid can continue to limp along, therefore, the only ones making money will be the retail chain--ie., the handset makers. Best, JS

To: The_Guru_00 who wrote (6875)	8/26/1999 5:15:00 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 29987

Guru, your point that the bond holders and shareholders have made a multibillion$$ donation is correct. Yes, the constellation can be operated at a much cheaper price. But just to keep it functioning will cost a lot with replacement satellites needed. Motorola and Kyocera can charge a high price for handsets and that will mean that the minutes will not be able to be sold at a price such as $1 per minute. The reason I call it a handset business is that Motorola and Kyocera have the negotiating power. The bond holders and shareholders have very little. If it closes, the bond holders and shareholders get nothing. Motorola and Kyocera miss suffer the opportunity cost of not selling some handsets over the next 3 or 4 years. Not a huge problem since they might sell only 100,000 or so if the minutes aren't nearly free. But if the minutes are nearly free, undercutting terrestrial, they could sell the whole 1.3bn minutes and that would take a million or three handsets and they'd make some real money. That's why I mean it's a handset business. The minute producers are not going to make ANY money. So they might as well sell the constellation to Motorola for a pittance. Motorola can then slash the price to free minutes which will get them HEAPS of free advertising. Then they can sell handsets for $10,000. Well, maybe not quite that much, but quite a lot. That's good for Globalstar because it will make them compete on price and forget their silly dream of $2 per minute. Airtouch is being absurdly greedy with their price of $1.50 or $2 per minute, which gives them a profit of as much as $1.55 per minute [they pay only $.0.45 or so per minute, maybe only 40c]. It will also dissuade ICO from stepping into the mayhem with even more minutes for sale. In case Airtouch haven't heard, auctions start at a LOW price and work up to what the market will bear. This is an auction, whether they understand that or not. Motorola can do well out of Iridium, provided they get the constellation for a pittance. Maurice