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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: ccryder who wrote (2269)	3/17/1998 3:48:00 PM
From: Geoff	Respond to of 10852

Now even Readware is getting into the options thang! Also, some on transponder pricing.... All this options talk has me totally confused, and I am still going... I figure that if I can get myself confused enough, everything will suddenly come into focus. ================== Subject: Transponder Revenues Date: Mon, Mar 16, 1998 18:50 EST From: Readware Message-id: <19980316235000.SAA24997@ladder01.news.aol.com> It is correct that the transponder revenue numbers I projected in my EBITDA model are lower than the average I indicated Skynet's 4th qtr 1997 transponders were generating. And it is correct that my Orion tranponder revenue numbers are lower than the company's $2.7 million/transponder indication. I have limited my numbers to the lower side, that is all. They could be be higher-- it is only that I was giving an indication of the EBITDA "going forward growth rate" for LOR transponders. I am quite aware of my 4th qtr transponder numbers as seeing a 170 basis point increase in margins. I did not forget that I wrote that. The EBITDA model post is simply to show that the indication is sufficient enough that the transponder EBITDA "growth going forward rate" is quite strong, and will be strengthening, if the business plan is executed in a timely manner. Subject: Re: LEAPS Price Date: Mon, Mar 16, 1998 22:14 EST From: Readware Message-id: <19980317031500.WAA04479@ladder01.news.aol.com> May I suggest rherman777 that you are not totally correct: it may occur in some cases that the stock which you say can be bought back after the call has been written may come to no longer exist. Some events occur "shot from the pistol" (the phrase I used the other day) where the stock of that company may come to be in another company's hands, e.g.-- i.e., it may no longer be tradeable. You obviously can no longer buy the stock of the company against which you had written covered calls. Selling covered calls is a serious business if you want to own the underlying common, i.e., if your purpose is to particpate in favorable corporate developments of the company whose common you own. There is no gainsaying that the covered options writer can never afford to be in the dark about possible positive corporate events. Options theorists can discuss "delta", "time value", and the like, chart configurations, and what have you: but it is all to nought-- all that theorizing-- if the options writer does not keep "ear close to the ground" for all possible corporate developments of the company on whose common he/she is trading options.The managing word is possible. In other words, the risk in selling covered calls in a company like Loral is, one might think, somewhat higher-- even substantially higher-- than options participants on this board seem to have stopped to consider. Subject: Re: Misc. emails Date: Mon, Mar 16, 1998 23:13 EST From: Readware Message-id: <19980317041401.XAA16140@ladder01.news.aol.com> Loral does not get any portion of reseller revenues. There are circumstance where G* shall be the domestic telco and satcom time provider (both reseller and wholesaler) (over and above instances where it transmits calls without the local ground). In fact, I believe there are a few countries, 7 seems to be the number I remember, where G* shall be both wholesaler and reseller. I think Canada, in fact, is one such instance. I am not absolutely sure of that. I do not believe AirTouch has a reseller agreement there. I believe G* Canada is the reseller. But I am not entirely certain. As far as how does G* know how to price calls at various times so as to prevent market overload: G* is charging a flat $.47/minute (US dollars) to the telcos. G* does not set the varying rates (the mark-ups) for satcom phone time to the customer. That will be up to the telco partners. G* does not then set the different prices that varying times during the day will see. Their price is always the same-- $.47/minute. In system overuse prices rise to discourage, in system underutilization prices decline to encourage. I do not believe that in the first two or three years the telcos will have the problem you suggest of having customers switch to another system if they can't use the G* system because of sytem overuse. There will not be enough capacity to handle the switch. That does not mean the telcos are not aware of the problem you raise. Obviosuly they are very ware. The question of pricing vs. usage has been run in simulated usage models to try to maximize both user usage and satisfaction with revenue flows. You are correct, the last thing a customer wants is a busy signal. It is not in the telco's interest to have busy signals. You will recall, in this regard, that they have committed to one billion minutes of time to G* over the life of generation 1. They did not do that, one may reasonably infer, without knowing that customer satisfaction with them has to be maintained. The good thing about the issue you raise is that there will be a ramp-up (learning curve) where some of the high usage times will be known before the system is completely in use, and the telcos will thus have empricial evidence to adjust their pricing schedules more efficiently for both customer satisfaction and revenue maximization.