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

To: Waitstill who wrote (7034)	8/31/1999 6:09:00 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 29987

Waitstill, if you spend $1 on a phone call, the bottom line before tax shrinks by exactly $1. Bottom lines are generally small compared with the revenue line. That's because all the costs eat up the revenue leaving only a little at the bottom. The fact that a minute is tax deductible doesn't help the situation. So to justify that $1 coming off the bottom line, there had better be at least another $5 or maybe $20 for some businesses, coming in the top line. A 5 minute Globalstar call is going to ding the company $10 in call costs. They need to get at least $50 extra revenue from that call that they couldn't otherwise get to justify that call. Businesses must be mindful of money gushing out. Tax deductibility is not a source of income, contrary to what many think. I agree that many businesses will find Globalstar calls worthwhile at $2 per minute. For example, there are nearly 300,000 OmniTRACS units in operation. Those vehicles must be out of contact by voice for a lot of the time. Hunt and pecking on a keyboard is all very well, but there's nothing like a chat by phone. If I was one of those truckers, I'd spring for $1200 so that I could always be in touch. At $0.80 per minute I'd make a few calls too, though mostly I'd wait to be in terrestrial areas to make calls. Having calling party pays instead of paying for somebody to call me would make it more attractive and I suppose Airtouch USA will have calling party pays. At $2 per minute, I'd be eating the profits a LOT faster than earning them and calls would be less frequent. It really is guesswork as to how many minutes people will use at various minute prices. My theory is that it is closely correlated with what people get paid. Individuals will make calls according to their income levels compared with the price per minute. Companies will get employees to make calls in correlation with their salary levels too because their earning capacity for the company is closely correlated with the salary they can get. A Xmas card salesman earning 20c per minute will not be asked to make Globalstar calls as readily as a 747 salesman or lawyer earning $3 per minute. Being late for a sales call for Xmas cards is less important than being late for the close on a 747 sale. So my argument is that the salary level will be closely correlated with the justification for using a Globalstar phone. At $1.50 per minute for a call, a 747 salesman or lawyer earning $3 per minute will make a call any time they feel like it. Even private calls to pick up the laundry etc will be justified if it saves them a minute or two or they can check where their golf buddy is. Of course the hassle of a big phone, flat battery is a drawback. Convenience is important to high value people and they won't want to lug around a big phone to save a minute on their laundry collection. My point was that to get 6m subscribers at $2 a minute might not be as easy as it seems. It will be much, much harder to lower prices and generate sales once the smell of doom is on the system, than to raise them if demand is huge. The free publicity if prices have to be dropped will be all bad and in the nature of <"Looks like another Iridium? Who wants to buy the latest dud?"> The free publicity if demand is huge will be worth its weight in gold [if that isn't an archaic expression] <"Wild success for Globalstar leaves handsets in short supply! Qualcomm boosting production as fast as they can. Early bird offer filled in the first week!"> I know which would see the stock price zoom faster than the minute price and handset price. Maurice