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Technology Stocks : Globalstar Memorial Day Massacre -- Ignore unavailable to you. Want to Upgrade?

To: rf_hombre who wrote (197)	5/16/2000 12:23:00 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 543

rf, thanks for the nerdy calculations. I think your random number guess of 1.5m dehypothecation [and 25c] is probably about right, but maybe a bit light. My random guess is something like 2m based on quite a few PMs and general comment from broker/financial adviser type people. But, if it's true that brokers will pay a rental for G! Tonka-Trucks, then there will be a countervailing pressure as the shares rise in price for brokers to offer cash inducements to people to lend their Tonka-Trucks to help satisfy the big demand for stock from short coverers. Those cash inducements will at some price tempt people who have G! in cash accounts to allow them to be lent which will enable shorts to cover and buyers to buy. By lending stock, the share owner causes the share price to be lower as that stock will be sold short. With a lower share price the lender's total financial value will be reduced. Which is not desirable. So, the amount that would need to be paid to tempt shareholders to lend their stock will probably be somewhere between 0.01% and 6%. At 0.01% the reward would not counter the loss in share price which would result from those shares being sold. At 6% it would do; or some numbers somewhere in that area, depending on the size of the holding. Say I have 1m shares which I move to my cash account. That would cause the share price to rise as shorts have to cover. Suppose other shorts are getting nervous about having to cover and with them now having to pay interest to the broker who loaned them the stock since their financial position will have moved into deficit. The broker will then have incentive to borrow the stock from me and pay some rent for that stock to entice me so they can lend to shorts who are moving into deficit on their accounts. If the broker doesn't borrow stock and lend it, the short will have to cover and the broker won't collect interest on the outstanding short stock they have loaned to the short. As the price rises, the incentive to borrow stock will increase and the brokers will have incentive to pay rent to obtain another little fleet of Tonka-Trucks for rent. That will cause people to move their stock back from cash account to margin account to loan the stock. So it will all rebalance. Your estimate of $25 as a balance point is about where I guess it would end up too because by then, I'm sure somebody would be offering to borrow my cute little Tonka-Truck full of stock and paying a good fee for the privilege. What will really matter is the expected profit stream from G! over the next 10 years and even $25 seems low to me to buy that income stream. But with pessimism, that might be about the right number. I suppose we'll soon find out as the free, open, informed, fair, active and liquid market will sort out just where the balance belongs. Funny that this [and the main] stream, which is alleged to be a criminal conspiracy by the WSJ and at least one law enforcement official, is a very good way for people to develop a more informed basis for their G! investment positions. I feel quite resentful of the SEC, Carrie Lee [if that is her real name] WSJ and that guy in California [not to mention that guy who claims to works for SI - whatshisname] saying that I'm some sort of criminal for helping inform people over the past 4 years and starting this discussion and suggesting an approximate date for people to dehypothecate. As some of you have brilliantly determined, Memorial Day is NOT available for dehypothecation. $9 seems much too cheap to me. At 20% a year return on $9, we would only be up to $32 a share after 7 years compound return. After 7 years, the system will be full, returning at least 10c a minute profit [assuming the wholesale price is cut to 20c a minute overall as incentive to get Verizon and co to cut their retail price to something like 30c or 40c per minute to really make things happen fast]. At 10c a minute profit, we can expect 10bn minutes x 10c = $1bn a year profit. At 500m shares [assuming huge dilution from the current 300m shares to raise enough money to carry over a couple of years with no revenue and to convert loans to equity] each share will collect $2. With a P:E of 30:1, we should expect a share price of $60. 500m shares and 10c per minute profit after 7 years is a pretty bleak prognosis for Constellation1. At a retail price of 30c a minute, that's cheaper than a LOT of cellphone traffic and vastly cheaper than many other calls and especially a lot cheaper than "No Service Available" which will still be the case over most of the world in 7 years. Okay, that's not so mathematically elegant as the si/mc ratio but it's another view and why I will NOT be selling at $60. Such an extremely pessimistic outcome seems almost silly, but worse than that is how people are pricing G! at $9. Shorts are expecting even worse! Mqurice

To: rf_hombre who wrote (197)	5/16/2000 1:02:00 PM
From: pcstel	Read Replies (1) \| Respond to of 543

RFHomre.....Of course the downfall in your theorems is the exclusion of the use of the "Infinit Improbability" factors.. Which once manifested, in conjunction with a "really hot cup of tea" will provide a rather "dis-tasteful" alternative to you quantitively robust, yet, wildly inaccurate results.. You see.. The problem must first be encoded such that it can be concisely described and manipulated!! This usually involves concatenating 'place holders' for each of the variables in some kind of string or list of objects. An initial population of these strings or lists (genomes) is then generated with completely random values in the place holders (genes). It's quite simple for the average 'blue collar worker' to understand.. If they understand the theoretical mathematical principles of Geometrical Voganism. i.e... "Any object in a state of rest or of uniform linear motion will remain in such a state unless acted upon by an unbalanced external force = poppycock!! Then you will see that you assumption of a 'p ratio' in the sub single digits is all but farcical.. If we consult "The Guide" under entry A177491 then you can see that a 'p factor' of 42 is much more consistent with "metaversaly accepted "Base 13" hyper-physics. The rest of your "basic math" I can concur with.. Abet, the crudeness of you assumption that 'mc' would ever reach a level of 0.33.. Simply unrealistic in todays financial markets.. yet not impossible.. Of course.. That is the same improbable probability of the NASDAQ hitting 30,000 by Memorial Day, but then again.. Why spoil all the fun here. In the end.. 206265 = pi = 42.. It is that simple.. Besides.. Maurice has to hope that someone in NZ has actually "shorted" his shares.. (assuming he uses a NZ broker). If not.. just another exercise of futility... But then again.. maybe he could "short his own shares" today.. And then request his broker to make them non-shortable near Memorial Day..Thereby resulting in a call from his broker back to Maurice telling him that he must "Cover his "Short Sold" shares, in effect making himself "ReBuy his own shares" But, at a higher price... Yeah!!! I think that would work.. PCSTEL