Lance,
This following is from the most recent 7 million shares offering SEC report. It clears the possible misunderstanding of the real market value of GSTRF vs. Globalstar Limited Partnership (G.L.P.) market value.
Per the report, GSTRF owns about 37% of GLP. The total outstanding shares of GSTRF after this 7 million offering is about 95.7 million shares. Hence GSTRF's current market value after the offering using the current price of $33 is roughly $3.2 billion. GLP's market value is $8.65 billion (3.1 billion / 37%).
Welcome for comments. I know Valueman calls for an audit.(gg) I totally qualify for the job if I have an access to real records. (gg)
Here is a part of the report,
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GLOBALSTAR TELECOMMUNICATIONS LIMITED
OUR COMPANY
We are a general partner, owning, as of December 31, 1999, approximately
37% of Globalstar, which is now commencing operations of its global
telecommunications network. We operate as a holding company to permit public
equity ownership interest in Globalstar. Our sole asset consists of our
partnership interests in Globalstar.
Loral, one of the world's leading satellite companies, is one of the
founders of, and, through a subsidiary, serves as the managing general partner
of, Globalstar.
GLOBALSTAR
Globalstar owns and operates a satellite constellation that forms the
backbone of a global telecommunications network designed to serve virtually
every populated area of the world. Globalstar's network, which we refer to as
the Globalstar system, uses Qualcomm's patented CDMA technology to provide
high-quality mobile and fixed telephone service to customers who live, work or
travel beyond the reach of adequately developed communications networks.
Qualcomm has agreed that Globalstar will be the only provider of mobile
satellite services to which it will license its patented CDMA technology.
Globalstar's service provider partners, who are experienced
telecommunications companies, are actively launching, or preparing to launch,
service in key markets worldwide. Globalstar and its service provider partners
have also begun intensive marketing campaigns and are adopting multifaceted,
locally oriented marketing strategies to serve their markets. Under Globalstar's
agreements with its service providers, these partners are the exclusive
providers of Globalstar service within their assigned territory and will retain
their exclusivity as long as they meet minimum performance goals. Under these
agreements, Globalstar acts as a wholesaler of capacity on its space segment to
its service providers. Globalstar has assigned the largest service territories
to its founding strategic partners, including France Telecom, Vodafone AirTouch,
ChinaSat, Elsacom and Dacom.
The Globalstar system is now commencing operations through nine gateways
which cover 58 countries. By the end of the first quarter of 2000, 18 gateways
are scheduled to be in operation, covering 79 countries and by the end of the
second quarter of 2000, we expect a total of 22 gateways to be in service,
covering 86 countries.
Globalstar service providers are now providing billable service in 11
countries, including Austria, Brazil, Canada, Greece, Italy, South Korea,
Switzerland and the United States. By the end of the first quarter 2000, service
providers plan to have billable services available in 61 additional countries,
including Argentina, Australia, Chile, China, Mexico, Russia, South Africa and
the principal nations of both Eastern and Western Europe. By the end of the
second quarter of 2000, a total of 82 countries are expected to be in billable
operations.
S-1
The Globalstar system is designed to offer a cost-effective communications
solution for areas underserved or unserved by existing telecommunications
infrastructures. Globalstar mobile phones are simple to use -- just like
ordinary cellular telephones -- and are among the smallest, lightest and least
expensive satellite phones currently available. These phones are multimode,
functioning as cellular phones where terrestrial cellular service is available
and as satellite phones where cellular service is not available. Globalstar
phones provide this multimode capability without separate modules or plug-ins.
Globalstar pay phones and fixed wireless phones for business and residential use
provide basic telephone service in rural villages and at remote industrial and
residential sites.
Globalstar phones have familiar features such as phone book, voicemail,
short messaging service, and, in some service areas, call forwarding. Globalstar
plans to introduce additional features this year, including data calls, Internet
access, email and fax capability, caller ID and position location. Globalstar's
utilization of Qualcomm's CDMA technology should enable it to swiftly adopt
future improvements as this industry-leading wireless technology evolves. In
addition, because the intelligence of the Globalstar system is located on the
ground, future enhancements are easily implemented.
Globalstar's full constellation of 48 satellites is in orbit and
functioning. Based on our experience to date, we expect Globalstar satellites to
have a useful life of 10 years, rather than our original expectation of 7 1/2
years. The Globalstar satellites use a simple, traditional "bent pipe" design,
amplifying and reflecting received signals directly back to earth, with no
intersatellite links. Gateways owned and operated by Globalstar service
providers then connect customer calls through the existing public telephone
network. As a result, the Globalstar system will complement and extend, rather
than bypass, the existing telephone network infrastructure. Globalstar is in the
process of completing a period of intensive user trials in which over one
million calls have been placed under a variety of conditions, including
simulations of full capacity utilization. Trial users rated call quality equal
to, or better than, digital cellular connections.
According to industry sources, more than 80% of the world's land mass is
not covered by cellular service. Globalstar believes, based on market research,
that its addressable market -- those who live, work or regularly travel to areas
underserved or unserved by existing telecommunications infrastructure and who
desire and have the ability to pay for telephone service such as that offered by
Globalstar -- is approximately 40 million potential customers. We expect that
Globalstar's first generation system will have a system capacity of
approximately 7 million subscribers, less than one fifth of Globalstar's
potential addressable market. In fact, because of the limited spectrum available
for use by mobile satellite services like Globalstar, the combined capacity of
Globalstar and the other existing and announced mobile satellite service systems
are capable of serving only a portion of this market.
Globalstar's original consortium of 12 leading international
telecommunications service providers and manufacturers has grown into an
international organization with marketing channels in 125 countries and
agreements with over 220 local service providers. Globalstar-supported
cooperative advertising is creating brand awareness globally and within selected
market segments, while sales channels are focused both on the mass market as
well as targeted market segments, including:
- government, including police, emergency and military users;
- commercial freight and fishing vessels, cruise ships and recreational
boats;
- truck drivers and business travellers;
- the forestry, mining, oil and gas and other natural resource
industries;
- wilderness guides and outdoor enthusiasts;
- agribusiness; and
- utilities.
S-2
Our service providers have an existing customer base of more than 100
million cellular customers from which they intend to identify for direct
marketing efforts those who work in, or frequently travel to, or through, areas
without cellular service.
THE OFFERING
Common stock offered by us.... 7,000,000 shares
Common stock to be outstanding
after the offering............ 95,742,794(1) shares
Use of proceeds............... We will use the net proceeds from this offering
to purchase ordinary partnership interests in
Globalstar. Globalstar will, in turn, use the
proceeds from its offering for general
corporate purposes, including:
- to accelerate beyond planned efforts for the
roll-out of Globalstar service through
increased support for service provider
marketing activities and the funding of
promotional discounts;
- development of new service features; and
- possible repayment of debt.
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Brian H.
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