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

To: ccryder who wrote (386)	8/1/2000 12:29:16 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 543

ragingbull.altavista.com Good Raging Bull post on short interest as well as the ownership structure of Globalstar. <olebear 54: You've got the right idea but the numbers are wrong. Months back I posted extensive information on the complicated make-up of our company. I did not save the post number or my working notes but from memory it's like this. The actual company is a limited partnership, ultimately there are partnership interest, each partnership interest has an equivilancy of 4 shares of commonstock. We the common stock holders own approximately 36% of the partnership. There are 97 million common shares currently issued. When you hear people refer to Loral owning 41%, they are referring to 41% of the partnership interest. There are others like Loral and these investors etal can at a future date convert each of their partnership interest to 4 shares of common stock. An interesting point that I have posted about this conversion is that Qualcom, Loral, etal can only convert after consequetive profitable quarters. Now does this mean that there are 96m common shares in float? NO. The actual number is 60m. The difference being that Loral and board members of Loral and others have purchased shares of the common stock, if memory serves me Loral in addition to the partnership interest owns 8m of the G* stock. What this means is that we currently have greater than a 61% short position and the short position has generally increased by 3m a month. Interestingly last month it seems that it took 7m short shares TO HOLD THE LID ON. In general shorted shares must be borrowed, which means our shares held in margin accounts. I have heard that a number of brokerages no longer consider G* marginable. Additionally a lot of folks presumably would not hold this stock on margin. So my assumption is they are nearly out of shares to borrow and sell short and in the future if we start to see a run up the shorts ability to sell into it will become more difficult. It seems mm can infact sell shares short that they have not borrowed. Currently they may be the ones selling into strength, I doubt anybody really knows. When you look at short interest it tells you 10 or 12 days to cover position. That is very misleading. They assume all sales are one sided as NASDAQ is a double count. In fact if shorts bought all the stock for a month they could cover their position IMHO. Hope this helps. >