Readware comments:
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Subject: Re: Report on Shareholder meeting
Date: Wed, Apr 29, 1998 21:21 EDT
From: Readware
Message-id: <1998043001213100.VAA11902@ladder03.news.aol.com>
Fozziebare:
The 1998 annual report of LOR, "Letter to shareholders", states LOR expects $1 billion in EBITDA. (p. 7, column 1 "Financial performance"). They will probably exceed that number by 9-11%. Figure 43% of this 9-11% higher number net to the company for fiscal 2000. Divide by probably 250 million shares , give that a 33-35 p/e. (Just take the number of transponders etc. and do the margins on the revenues those transponders command; and then take 44% of
G* earnings, etc.).
As for Zenit-2, if I can make the suggestion: reread the comments, if you would, that I prepared for others outside this board and posted here: "The View from Plesetek". Additionally, if you can, see what is said about Zenit-2 at Georgia Institute of Tech, UCLA Engineering, U of Colorado at Boulder, and MIT. Don't take G* or LOR's expression of confidence.
We didn't. Just as we did not for their G* projections. We did our own survey-- three times--came in finally at 1.82 million for mobile users, 25% for fixed in addition to that, for 2002. That is below G*'s numbers by 800,000, but it does show, as we view it, that G* has avoided and learned from the mistakes of the old Telstar and Amer Mobile (a real failure). Our work, not their word, showed us we believe they have a real, genuine business. G*
needs 400,000 users to break even.
That goes for other parts of LOR-- we talk to their suppliers, competitors, customers of their competitors, see business trends in contracts and bids here &c. We do not take LOR's word.
So, as regards Zenit, I would not expect Globalstar to say they were fearful, in heart-pounding dread, of a catastrophe for Zenit-- especially at a shareholder meeting. From everything so far that we have been able to identify from seminars, engineering contacts, and readings since the beginning of February, it does appear that Globalstar has made a very adequate business decision. But you have to read and read and read everything you can to see if
there are grounds for disbelief or belief in statements about Zenit, and talk to others outside Loral, G*, and Qualcomm. I would not want to just take the company's word for it. We are, after all, talking about close to $480 million going up 15 July. And that reflects a lot of shareholder value. This Zenit-2 decision, I shopuld add, was made by LOR in consultation with a lot of others outside G* and Qualcomm.
So Globalstar will have ready on 15 July 28 satellites, 20 to be launched. In the event of a mishap Globalstar will have 8 sats ready for launch sometime thereafter (recall my post about the 10 Boeing launches LOR has bought but not calendarized). In June sometime Zenit-2 will come into sharper focus. More intelligent and informed comments will be able to be made.
By that time, though, LOR should have made another acquisition, and I am thinking will have cut its internet affiliation system deal. Also, we should be hearing more from Brazil and LOR-Alcatel. Since Americom owns part of the Argentina-Chile system, I doubt if they will get any bidding in.
Subject: Re: Readware
Date: Wed, Apr 29, 1998 21:49 EDT
From: Readware
Message-id: <1998043001492000.VAA16919@ladder01.news.aol.com>
Well, I actually have been in Santa Monica only seven days out of the last 57. So I have had my AOL email tracker shut off. I am back here for a while now. I went to seven seminars, 5 conferences, visited three countries for business, and was in Washington, DC, talking to and listening to various Congress people about deregulation.
As for the gateways: G* is two months behind on the total number. They need 12 to have 87% coverage, and they should have them ready by February. On those 12 they are up to date. I can't imagine they will not be ready. Especially in Korea and China.
The handsets are an issue, yes. There was a late design change by Qualcomm a few months ago, and now there has been "talk" about a different design for the fixed ones. The mobile ones are of top priority-- LOR does have three firms as you know making them. They have to have 300,000 ready by year-end (especially now that they are talking [however quietly-- but they are] about beginning a roll-out in December of this year). I'll be on that in a few
weeks. Erricson is the company to contact. And you know the G* 2 system will have more capabilities than 1, so the chips have to be redesigned for that too. But that's in 2000.
I think LOR-Alcatel Andesat will be more important, visible, in a few months on the privatisation.
Cyberstar demand is there There are already bookings. So, a second transponder on V means that C* is expecting to do at least $37 million in the 4th qtr.
I have heard the same thing about ACeS. Don't know yet.
Telstar X is for Skynet. That is supposed to be built for 4thqtr '99, 1st qtr '00 launch. I personally believe that is in anticipation of the Brazil privatisation. Just a surmise on my part.
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