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

To: Henry Eichorszt who wrote (10198)	2/20/2000 2:47:00 PM
From: Mazman	Read Replies (1) \| Respond to of 29987

From Feb 21 Barron's (The Trader, part 2) ... Hymowitz is short 110,000 shares! <<Globalstar Telecommunications has had a rude awakening. The company, which promises global phone service via satellite, saw its shares soar to a high of 53 3/4 on January 3. Since then, they've thudded to earth, closing at 23 on Friday. The runup was helped by a favorable mention Globalstar received in the Gilder Technology Report. The newsletter has gained a reputation for picking tech home runs, like Qualcomm. Globalstar's shares turned south as investors concluded that the company was reducing its 2000 forecasts. Last year, it indicated that one million handsets for its system would be produced in 2000. The target fell to 600,000 in November and to 450,000 this month, owing to manufacturing delays at Ericsson, one of three companies that make Globalstar phones. However, the company's manufacturers have managed to boost production, and the latest estimate is 580,000. "We think we are on a very firm course to achieve our 600,000 goal by yearend," says Bernard Schwartz, CEO of Loral Space & Communications, which owns 45% of Globalstar. The shares also were hurt by a shift in investor sentiment. Last year, bulls on the stock believed that Globalstar could sell all the handsets that could be produced. Now there are doubts about demand. Investors have demanded to know the number of handsets sold so far. But the company says such information would have to come from its partners, who sell the handsets. Instead, Globalstar plans to disclose how many minutes the system was used in the first quarter. But the data won't be released until sometime after March. A final concern revolves around how long it will take for the company's operations to be global, says John Coates, equity analyst at Salomon Smith Barney. He downgraded the stock to "buy" from "outperform" in October and has a target of 26 on it. Different companies, known as gateway operators, are in charge of providing Globalstar service in different areas of the world. The gateway operators need to coordinate their operations so that a U.S. user can get service in London, for example. But thus far, the gateway operators haven't coordinated billing and technical issues and U.S. users can operate their phones only in the States. However, says Schwartz, "We expect the issue will be resolved and agreements will be made between the service providers in coming months." Luckily, the company has a nice cash cushion, having sold 8.05 million shares at $35 apiece in a secondary offering last month. Sentiment remains sharply divided. "We think the business model makes no sense," says Greg Hymowitz, a principal at Entrust Capital, who also happens to be short about 110,000 shares at an average cost of 24 1/2. But there are a number of investors who think the bonds, which trade in the mid-50s, are attractive because they expect the company to survive.>>