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: djane who wrote (7028)	8/31/1999 12:55:00 AM
From: djane	Read Replies (1) \| Respond to of 29987

Good post on impact of bankruptcy distractions on I/ICO Top>Business & Finance>Investments>Sectors>Services>Communications Services>GSTRF (Globalstar Telecommun.) Re: Shaggy / bankruptcy by: michaelth1 10957 of 11057 I agree with your assertions that G has yet to have proven that they know how to market their product. I think that most agree (except those who claim their is no market for sat. telephony) that marketing is where G* will either succeed or fail. I* showed that. So far, G* hasn't impressed anyone with its marketing skills, although most of the effort will come from the SPs. I think that people are really underestimating, however, how difficult and time consuming it will be for I* and ICO to compete with G. As a guy who has dealt with more than a few bankrupt companies (some of which were viable companies doing well, but had too much debt), bankruptcy proceedings take time and lots of effort of management. Time is money, even more so for I which has sats in the sky with a very limited life span. I suspect that both ICO's and I's management is spending the vast majority of their time on the bankruptcy proceedings at the expense of not devoting enough time to operations. Not much they can do about it either, the first priority is paying the bills. Generally, a companies' management has usually never navigated through bankruptcy and is shocked and frustrated by the "uniqueness" (I'm being kind to all those bankruptcy lawyers out there) of the proceedings. A huge learning curve is likely currently being experienced at I and ICO headquarters. Larger than most since these companies are international. Result (imo): ICO and I* may eventually come out of bankruptcy (or maybe not), but it won't be for 4+ months (I predict 8+ months). As we know, four months is a long time, particularly in a high tech industry like sats. G* must capitalize on this. BUT, there are other problems that ICO and I* face besides simply "getting out" of bankruptcy, such as (to name a few): 1) Employee moral. I would expect that both companies are losing some key middle management/technology people. Not "key" people, but important people. No one wants to work for a company in bankruptcy. Those who aren't leaving are probably trying to leave or at least distracted. Bottom line, this isn't good for productivity. No press releases will be made, but it'll take time to fill positions, pass on knowledge, etc. 2) Third-party contracts. I* and ICO will have a very difficult time getting third parties to do any work for them. Phone production: It will slow down dramatically. Phone r&d (smaller phones anyone?): it will come to a virtual halt. Launching sats: I doubt it (unless Motorola pays the money in I's case). 3) Consumer confidence. Consumers don't like buying from a company that may not exist in 2 years. In I's case, would you buy a phone (for $1,000+) from a sat company that may not exist in 2 years and which is virtually guaranteed to not replace its sats when they start to fail in 5 years? I doubt it, particularly when a viable alternative exists, or will soon (G). I could go on. Bottom line is be careful not to be fooled into thinking that bankruptcy is a sterile proceeding that is used to "reorganize" and come out better than ever in a month or two. The longer a company stays in bankruptcy, the worse it gets. There are some real sharks battling it out now, to the detriment of I and ICO. G* must take advantage. These bankruptcies can turn into a huge positive for G* if it executes properly. If not, G* will follow into ch. 11 in a few years and we'll never see sat. phones ever again (no financing will ever be available). My bet, fwiw, is that G* will execute and prosper greatly, although I think it will stumble out of the gate for the first few months. Posted: 8/30/1999 12:05 pm EDT as a reply to: Msg 10947 by shaggy_64