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

To: The_Guru_00 who wrote (6891)	8/26/1999 4:06:00 PM
From: John Stichnoth	Read Replies (1) \| Respond to of 29987

how can a Globalstar bull make a statement so negative on the market for satellite services. I try not to be a bull, but to be objective, although I do come down on the side of potential reward being greater than risk. My comments were directed at irid, not the market in general. Irid has problems unique to itself. Their name has been (I think irreparably) harmed. They have limited minutes. Their technology is inferior. They will have a competitor (G) that they will have to divide new customers with. And they will have to compete on price. Absent debt service and depreciation (ie., replacement sats) irid's and G's fixed costs are essentially equivalent to one another. And, both have very low variable costs. So, the key to real (I mean LOTS of!) profit is to have lots of minutes available over and above those required to cover fixed costs. G* can price just as low as any price irid could offer, and still earn a profit while irid continues to suck wind--because of its extra available minutes. The inferior technology is more important here than in land-based cellular. The soft handoff and sat capacity are critical to service providers' decision on which technology to back. The TDMA service providers will not back additional investment in their groundstations or anything else, in the face of G's CDMA-based service. Yhe above comments are vis-a-vis Iridium's prospects. I will say, however, I see one way out for them-- if G is suddenly and unexpectedly successful. If G* is a tremendous winner very quickly, that validates the market while Irid's infrastructure is still in place. Irid then might pick up enough customers, without ruinous price competition for themselves, to fill up their minutes and make some money. But, that would need a G* success that I don't think will happen. (However, here's a thought. . . Maybe G* is sliding to the right just so they make sure they do nothing to help irid stay in existence! There is one asset that irid has that might have value--their orbit slots. And G* is the company best able to use those slots. Hmmm, G* to pick up some cheap orbital slots to double their capacity? Absolutely just a thought with no basis in evidence.) Best, JS

To: The_Guru_00 who wrote (6891)	8/27/1999 4:17:00 AM
From: mthomas	Respond to of 29987

This is one way that could work: >If the retail prices (handsets and minutes), how can Iridium fail >miserably and G* be a grand slam homerun. And please dont give me >the CMDA/TDMA answer, because that is not enough of a diff.< Same way Studebaker crawled under the table while GM, Ford, Chrysler, even Rambler (AMC) pulled forward to succeed. Just having a market to supply is not all that is needed. Motorola et al have demonstrated a thorough lack of responsiveness to the actual market, marketing, and technical cooperation needed to be a success. By tech~coop~ I mean they have so few local telcos involved that they will be prevented from participating where G* will be (is) welcomed. And no further competition for a couple more years......what a deal, and no DOJ anti-trust worries, not even the F.B.I., if we can believe what we are told from the head of investor relations at G*. As far as the CDMA and TDMA picture, try upgrading those TDMA sats in a few years........game over. Motorola may pull some bucks out of their debacle yet, but they will only be misinformed bucks, or bucks coming from governmental connections to make use of their sats. You make some interesting points, but this is not one you can defend so well. I like the points you make regarding the finances, but your marketing perspective would be more appropriately employed by Motorola.......... btw, you are right, shorts will not necessarily cover at the first sign of success, but as (when, if) the business launch becomes healthy and revenue and services appear to be workable, investors will begin voting that stock price up, and the 20% short interest will only turbocharge a rising price. That is the success I am looking to monitor, and that is the first sign of which I should have been more explicit to define. Keep watching this space for future developments :))