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

To: Geoff Goodfellow who wrote (12455)	5/9/2000 6:52:00 AM
From: KM	Read Replies (1) \| Respond to of 29987

From Herb Greenberg's column this a.m. Satellite insensibility: "People ask me the difference between Globalstar (GSTRF:Nasdaq - news - boards) and Iridium," says John Coates, the analyst at Salomon Smith Barney who covers Globalstar. "I tell them, 'Something very important: Globalstar is worse.' " Coates told me that yesterday, after he had downgraded Globalstar from his firm's equivalent of a buy to a hold. (He had downgraded it from the equivalent of a strong buy to buy last October.) This time, the downgrade followed what Coates felt were worse-than-expected first-quarter numbers. "Key figures are billable minutes of 550,000 vs. our already downwardly revised estimate of 3.7 million," Coates said in a report to his firm's brokers. "This implies average subscribers of 1,000 to 4,000. These numbers are worse than Iridium's were one year ago." The saga of Globalstar, which has been detailed exquisitely in several recent pieces by TheStreet.com's Tally Goldstein, hinges on the company's ability to raise cash. The company has said that it'll run out of cash by the third quarter ("That's just five more months," alerts one short-seller) if it can't get a $250 million bank credit line renewed. Coates goes so far as to say Globalstar could soon be in default on some loan covenants, in which case "the risk of bankruptcy and dilution to equity holders increase substantially." The company, of course, doesn't believe that will happen. Neither did Iridium (Info only - no position)