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

To: Shtirlitz who wrote (9199)	1/5/2000 2:37:00 AM
From: Red Heeler	Read Replies (1) \| Respond to of 29987

Shtirlitz, This may be of some interest to you. It's from the portfolio manager's diary of Robert Loest's IPS Millennium Fund (I don't own the fund but I like the way he thinks). It's nothing new in light of previous posts but possibly helpful if you're looking for an off-thread view. December 22, 1999: It's the Bandwidth, Stupid! For Millennium we bought 30,000 GSTRF today. I've been waiting for things to become clearer regarding how much of a shortfall GSTRF will have in the number of satellite phones it can get manufactured. Seems pretty clear they aren't going to come anywhere near what they had planned, so the bad news is already in the stock price. Thousands of people have already been beta testing the phones, using CDMA technology, and they work as advertised. This company will be the survivor in this area, so there isn't any danger in owning it, just in overpaying for it, and we think that's past. The Gilder Technology Report, the tantric Talmud of the Telecosm, makes some interesting points in its latest and a couple of previous issues. First, "Falling launch costs could ultimately make satellite phone systems easier and cheaper to run than terrestrial wireless." VentureStar will reduce the cost of lifting a pound into low earth orbit from $10,000 to $1,000. Second, the Globalstar system at full use costs only 5 cents per minute, compared with $1/min. for the failed Iridium system. Third, Globalstar satellites are small, low-tech, dumb bandwidth transfer stations, costing far less per satellite, needing fewer satellites, and using far superior CDMA technology than the TDMA technology designed into the Iridium satellites by Motorola. They are LEO (Low Earth Orbit) satellites, costing far less to launch and requiring much lower power transmitters on both the satellite and in handsets, than the geostationary, high earth orbit satellites of Iridium, which cost huge amounts to construct and launch, and require a phone the size of a small briefcase to push a signal that far. Moreover, the Iridium systems are actually huge satellites containing intelligent, central office switching systems, hoisted into orbit at enormous cost, and using obsolete technology. This, in an age of dumb networks with the intelligence increasingly at the periphery. Iridium is another instance of a dumb network, but its case the intelligence is missing at the design and management levels (where Motorola simply didn't get it), instead of at the center of the network, where it should be missing. With Globalstar, it's the exact opposite - intelligence in design and management, almost none in the satellites. Best of all, almost no one understands all this yet, including Craig McCaw. So the price of GSTRF is down huge because most investors are not making the crucial distinctions between the way they are doing things, and the way Iridium did (or actually didn't) do things. Sometimes complex technology presents us with opportunities we simply would not have otherwise. This is one of them. Your ever-vigilant servant is jumping on it with both feet. CC