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

To: y2kate who wrote (17045)	9/20/2000 10:49:06 AM
From: Jetter	Read Replies (2) \| Respond to of 29987

y2, it simply means g* couldn't raise funds from traditional means. THey had to guarantee to BS that BS wouldn't get caught holding the bag. In addition, the lower this goes the more dilution it requires for g* to get the $105 mm... Peace

To: y2kate who wrote (17045)	9/20/2000 11:36:25 AM
From: dwight martin	Respond to of 29987

This (BS deal) is not something I feel I have a good handle on. You will have noticed that the stock did the same thing when the G* drew down the $250MM- it went up briefly, then eased a couple of points. What I see is that G* pays $5 million up front (4 payments, all due this month) and may choose to compel BS to buy the stock at about a 6% discount from the share price on the day of LOR's choice: "Tranche Closing Date" means the third Business Day after delivery by the Company to Bear Stearns of a Notice of Sale, on which payment and delivery of the Applicable Tranche Shares occurs, unless extended pursuant to Section (2)(a)(iv)." "At any time prior to September 18, 2001, the Company may effect a sale of a Tranche pursuant to, and subject to the terms of, this Agreement by delivery of a Notice of Sale to Bear Stearns at 245 Park Avenue, New York, NY 10167 by 5:30 p.m. New York time on a Business Day. The Company may consider delivery made via fax complete upon the verbal confirmation of receipt by Bear Stearns." "The Company shall not issue a Notice of Sale, and any such Notice of Sale so issued shall be deemed ineffective, unless each of the following conditions is met: (i) a Notice of Sale was not issued on the immediately preceding Business Day; (ii) Bear Stearns is not subject to a restricted period (as therein defined) of Rule 101 of Regulation M under the Exchange Act with regard to the Common Stock; and (iii) at no time on the Notice Date had the Common Stock traded at a price of $4.50 or less." "Commitment Fee. The Company shall pay to Bear Stearns $5,000,000, in consideration for entering into this agreement. Such payment shall be made in cash according to the following schedule: Amount Date ------ ---- $1,500,000 September 18, 2000; 1,000,000 September 21, 2000; 1,500,000 September 26, 2000; 1,000,000 September 29, 2000. Their cash need was not immediately urgent, this is a medium term thing, and therefore I assume that G* sees it not as a desperation move, but as a prudent and possibly sly move. Maybe it's price protection against the upcoming sale of the LMT shares. Maybe it is a plan to skewer the shorts, but I'm skeptical that G* would specifically make such a plan. Maybe it's a good financing deal given that G* can immediately lock in the benefits of any rise in stock price, regardless of how temporary it may be. Surely, a good aspect of the deal is the gain in % of partnership that will result. But what is the real nitty-gritty here? I just don't know. Does anyone have a comment on the $4.50 bit? My guess is that it represents Bear Stearns' threshold of hopelessness. What's the betting on a sale of prepaid minutes to IFN? To the USG? The critics of Schwartz's political contributions would really wig out if that happened, wouldn't they? Maybe the whole thing hinges on the elections . . . . Is Bear Stearns heavily Republican, heavily Democratic, or neutral?