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

To: djane who wrote (7029)	8/31/1999 12:57:00 AM
From: djane	Read Replies (1) \| Respond to of 29987

WSRN's Company of the Week Globalstar Telecommunication (NASD: GSTRF) (via G* yahoo thread) www1.wsrn.com In June, 1997 investors snapped up a new issue of stock from a company that promised to build a global mobile wireless communications system. Iridium (NASDAQ: IRIQE) -- which once sported -- a market capitalization of $11 billion -- filed for bankruptcy earlier this month, despite backing from major companies like Motorola (NYSE: MOT $91.0625). Just a year later -- July, 1998 -- investors again welcomed a company, this time partnered with Hughes Electronics (NYSE: GMH, $ 52.625), that promised to do the same thing. Last week, ICO Global Communications (NASDAQ: ICOGF) also filed for bankruptcy court protection. Is this the end of the line for a global wireless communications system? Maybe not. This week's Company of the Week is Globalstar Telecommunications Limited (NASDAQ: GSTRF, $28.875), the only remaining non-bankrupt competitor in the mobile satellite service market. Globalstar -- together with its partner, Loral Space & Communications Ltd. (NYSE: LOR, $19.0625, is nearly finished constructing and launching 56 low-earth-orbit communications satellites and a network of earth based gateways that will facilitate any-time, anywhere mobile communications on earth. If all goes as planned, the Globalstar service will be available starting this October in the U.S. & Canada, China, Russia, Argentina, Korea, France and South Africa. Loral owns 42% of Globalstar. Anticipating less competition, bullish investors have pushed GSTRF shares up more than two fold since the low of $12.375 on March 29, although they remain 22% off their $37 high of March, 1998. Apparently, investors are convinced Globalstar will succeed where others have failed. In the case of Iridium, obituaries point to both flawed technology and marketing. The over-sized phones were said to be too expensive (around $3,000), the pricing structure high and confusing and the system not fully operational. ICO's failure may have been related to Iridium problems as investors sought to limit exposure to this area -- ICO needs to raise $1.6 billion before it can start its service in late 2000, a full year after GSTRF begins its roll out. Bulls on Globalstar point to the fact that the company has already launched enough satellites to begin service and that all 48 are expected to be in place by year end if launches go well, that it already has agreements in place to market its service in 120 countries, that it uses tested CDMA technology (see NYSE: QCOM $183.75), and that near term financing is in place. Bears suggest that the failure of Iridium is a clear sign that the market is not ready -- or, even worse, does not need -- this technology. In addition, the Chapter 11 filings might enable GSTRF's competitors to revamp themselves without the crushing burden of debt payments. Analysts anticipate that GSRTF can earn money before taxes, interest and depreciation (EBITDA) with fewer than one million users, which they expect within one year. Iridium, it should be recalled, failed to get even 20,000 users against its guarantee to bondholders of over 500,000. Analysts will get a better look at Globalstar's current position and strategy at an analyst meeting scheduled for September 8-9. Will the service be priced and marketed right? Does it work? Is there a need for it? Will Iridium -- as partner Motorola suggests -- be restructured within 30 days? Is GSTRF a buy, sell or hold? With WSRN's data center, BASELINE reports and extensive links you should have what you need to make an informed decision. WSRN.com, Wall Street Research Net ¸ Copyright 1995-99, Wall Street Research Net.