To: JGoren who wrote (10170 ) 2/18/2000 7:30:00 PM From: leo_bloom Read Replies (1) | Respond to
Testicular fortitude. (Can I post that?) It's what we needed for this week's stock price action. For the women among us, I guess the appropriate phrase would be ... I better not go there. Thanks, JGoren, for the information on the QCOM CC. I'll try to listen to more of it this evening. ... Unfortunately, the butt-kicking administered to Globalstar's stock this week has my natural paranoid tendencies working in overdrive. I've been contemplating a few conspiracy theories I'd like to pass along. Theory 1: All the SPs are secretly afraid that Globalstar will take over the world's wireless communications within the decade, so they're letting the project die on the vine, so to speak. Of course, the fact that QCOM and others have equity stakes in G* probably dispells that theory. And we know that even if Globalstar went bankrupt, somebody like Craig McCaw would pick up the pieces and make the whole thing fly. So nix that theory. Theory 2: It's the Republicans. Somewhere in a special control center secreted in an excavated granite mountain, a head-shaven Newt Gingrich (wearing a Nehru jacket) has been pulling GOP puppet strings to strongarm (or bribe) companies like LMT to stifle the stock price of corporations whose CEOs made massive contributions to the Clinton campaign. Farfetched? Okay. Theory 3: ... I can't think of a theory 3. I have no idea whether Mr. Hymowitz and CNBC anchor Mark Haynes are Republicans. ... Disclaimer: Some of my best friends are Republicans (and Democrats, too). I have no party affiliation. I have nothing personally against Mr. Gingrich, I was just using him as a public persona for purposes of humor. Same goes for Mark Haynes and Mr. Hymowitz. Please don't sue me. If need be, I'll recant everything and offer a full, abject, groveling apology. Okay, what happened this week and last week? Globalstar does its secondary, which puts the Street on alert. It gives the Street the opportunity to ask (legitimately): Why raise this funding? Why now? The explanation from management might very well be on the level, as well. But with the rollout as slow as it is, the natural question for investors is: "If everything was going as planned, why would Globalstar need to raise extra cash for marketing--i.e., to stimulate demand?" If demand needs to be stimulated, then it gives rise to the fear (justified or not) that maybe there are signs that demand is going to be weaker than expected and the company is reacting to this. Okay, so the stock price starts to slide a little (week before last). Then Loral comes out with its "stealth" convertible preferred offering. With the timing and all, that's like a one-two punch for already edgy investors. Nevermind that Loral has declared that the $400 million is going to be used to gear up for its new broadband project, the suspicion is that the money's really going to be used to keep G* from sinking. And the fact that specifics about the broadband partners were not revealed only adds to the paranoia. Then you add to that John McCain's bashing of Loral on Larry King and the Hymowitz/Mark Haynes tag team on CNBC, sprinkled with a fresh dash of impending NASDAQ correction, and voila! you get sustained panic selling this week. I've been hearing that Mr. Schwartz is going to be on CNBC next week. Maybe there are some things he can say about the Loral CP and the Globalstar secondary offering that can put some of investors' fears to rest. Just my Old-Milwaukee-influenced ramblings this evening. Regards to all.
