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

To: Jon Koplik who wrote (10056)	2/10/2000 10:04:00 PM
From: biffpincus	Respond to of 29987

My letter to GSTRF Investor Relations .... Subj: A few questions for IR ... (GSTRF) Date: 02/10/2000 9:47:36 PM EST From: Biffpincus To: irelations@hq.loral.com I have been receiving some very powerful recommendations regarding your company from friends, brokers and a recent very bullish comment in The Bullmarket Report, a valued investment resource of mine. I have just started my DD, and include below a recent email of mine to an investment group I belong to. If there is any information you can provide me that responds to some of the questions I've raised, I would be very appreciative. Many thanks for any information you can provide me. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX .... I'm starting my research into GlobalStar (they are the apparent technical and fiscal superior to Iridium). I've been interested in GSTRF for awhile now and have recently had a number of friends and brokers I know heavily recommend this stock to me at these price levels ($31 1/2). That coupled with The Bullmarket Report's incredibly strong endorsement of it (a couple of days ago they wrote that GSTRF has the highest price appreciation prospects of any stock they currently follow), has made me more than VERY interested. I have a great deal of respect for TBR's DD and stock picking abilities, especially when it comes to their tech and biotech choices. From what I've read so far, GlobalStar is past the capital funding stage. They have every satellite in orbit with back up and redundancy systems in place. There was a production slowdown in the manufacture of their handsets ($1,500.00), that they expect will be caught up with by the summer. They expect 600,000 customers by the end of the year, down from a previously forecast 1 million (The company says it will break even with 550,000 customers -- TBR write up below) Technically, the stock seems to be trading at an apparent three year base of approximately $30 @share - down from a high of $54.00 and up from an $4.00 ipo low (in '95). They have drastically lowered the cost per minute from what Iridium was offering their customers a few years ago ($3.00) to a published $1.50 now with a "rumoured" $.75 coming shortly. I have not confirmed the following yet, but I've read on the boards that their cost basis for air time is $.05 a minute. If this is a case, they've got a phenomenal profit margin going for themselves. The cost of the hand set is of course a primary red flag to me, but my assumption(?) is that cost will only go down from here. But at these levels, it is hard to imagine a huge growing market for their services. It seems like a B2B play as opposed to getting a huge consumer base to buy into their service. At a certain point, with the handset price as it is, the market will have to top out sooner or later. This thought leads me to my next devil's advocate question. In terms of market share, wouldn't a global ISP system (which is coming), where inexpensive internet data and voice terminals located all over the world @hotels, airports, business centers, etc, et al. -- present a highly competitive threat to gstrf's global satellite system and its business prospects? I'm typing out these questions just to get started on my own DD search. But if anyone in the group has an opinion, I would certainly be all ears. When I come across anything interesting, I'll be posting it here first. David XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX The Bullmarket Report Original Write-Up: GLOBALSTAR TELECOMMUNICATIONS, LTD.ÿÿÿÿGSTRF Globalstar is providing global telecommunications service via a network of 48 low-earth orbit satellites utilizing Qualcomm's (QCOM) code division multiple access (CDMA) technology.ÿ Because of the low earth orbit of its satellites and because users will have multiple satellite connections, users will not have a perceptible voice delay and should get continuous service between satellites even if the user encounters signal blockage from buildings, terrain or other natural features.ÿ Because Globalstar is providing additional service to their local service providers' already existing infrastructure -- its mobile phones can operate on both satellite and cellular signals -- Globalstar is allowing its service providers to economically extend global service to both new and existing customers.ÿ With its current financing and some financing from vendors, Globalstar has enough cash on hand to operate until the fourth quarter of 2000, when it expects to become profitable.ÿ Needing only 550,000 subscribers to break even (paying operating expenses and interest) and with its competitors dealing with lawyers instead of customers, Globalstar's share price may soon join its satellites in orbit.ÿ