Your right John. I suggest anyone still holding sell now before it goes down even more tue.
Taking A Dive
by Lynn N. Duke, staff writer
Investors in Platforms International should be ready for a wild ride
An unmanned aircraft circles the Earth, projecting a grid 11 miles below
that will bring phone service to Latin American peasants in the fields and
barrios. Plot from a sci-fi novel? Nope. Try a ploy to convince investors that
moving into Latin America's telecommunications market is as simple as
flying to Detroit.
Platforms International Corp. (OTCBB: PLFM)
(http://www.platforms-intl.com/) plans on cracking the lucrative Latin
American wireless telecommunications market with technology that has not
been proven long-term, and will be facing competitors that have
considerably deeper pockets and more dependable hardware.
The upstart company, whose shares now trade for about $1 after nearing
$2 in recent days, claims to have a five-year jump on other companies
developing similar technology and expects to reap at least $500 million
from that head start. Platforms International successfully tested its
technology last month in California during a brief demonstration. But
whether the technology is sustainable or desirable is yet to be seen.
"That technology is still regarded as not that credible," said Carlos
Guzman-Perry, director of Latin America and the Caribbean for the Yankee
Group, a Boston-based telecommunications consulting firm. "It has not
been deployed in any market and proved to be reliable and cost effective."
Some of Platforms International's boasting points are actually moot points,
according to one expert. The company's claim that its signals are three
million times stronger than high orbit satellites and 200 times stronger than
low orbit satellites makes no difference.
"It doesn't matter," said Bob Egan, research director for the Gartner Group,
a Stamford, Conn.-based information technology consulting firm. "Whether
it's a terrestrial or space system, you have to have adequate capacity.
There's a minimum that must be met." Anything more is undetectable in
performance.
And while Platforms International is still seeking its first contract,
competitors with proven satellite technology are flooding Latin America as
governments privatize the telecommunications systems.
One is Iridium World Communications (Nasdaq: IRIDF), a consortium of
industrial and telecommunications companies, which is deploying a
constellation of satellites that will cover the globe. Iridium
(http://www.iridium.com/) has a market capitalization of more than $720
million. Another company, privately held Ellipso (http://www.ellipso.com/) is
also making a dent in Latin America with a 17-satellite system.
"With global mobile PCS coming from Iridium and Ellipso, prices are going
to fall very quickly," Guzman-Perry said. "The concept of an unmanned
plane may be useful for remote areas, but then where is the economic
support?"
The Pool Is Dry
Where is the market, indeed? While there's no disputing that the population
centers of Latin America are ripe for a telecommunications revolution,
remote areas may go a lot longer before converting to wireless, or
accessing any system at all.
Platforms International's primary targets, according to its website, are
Guatemala and Brazil. Guatemala's system is still in the process of going
private. Even then, the current monopoly will have exclusivity for one year,
according to Guzman-Perry. And experts estimate less than 10 percent of
the nation's 10 million people can afford phone service at Platforms
International's proposed rate of $30 per month.
The privatization of Brazil's national telecommunications company, Telesp,
is nearing completion. Once in place, Brazil will be divided into 12
geographic regions. Each region will have a Band A and Band B. Band A
licenses have gone to Telesp's successors, while the B bands have been
auctioned off to newcomers. Among those new competitors are companies
like BellSouth, which is part of a group that recently paid $2.5 billion for the
B band license in San Paolo, according to Egan.
Platforms International plans to sell its technology to any and all of these
competitors, many of which are already hooking up to satellites that also
cover remote areas.
Engineers working on Bell South's Brazil operations had never heard of
Platforms International, according to John Price, a BellSouth spokesman in
Atlanta.
Overall demand is also hard to pinpoint. While there are waiting lists in
densely populated areas (Bell South has more than 1.5 million people lined
up in Sao Paolo), for many, phone service is a luxury. In Guatemala, the per
capita gross national product was $3,080 in 1994, according to the CIA
World Fact Book. Brazilians, at first glance, appear to be slightly better off,
with a 1994 per capita GNP of $5,580. But faced with an inflation rate of
more than 1,000 percent, those reals don't go too far.
According to its website, Platforms International projects a $30 per month
charge for subscribers to its system. Obviously, based on the above
figures, that puts the service well out of reach for most Brazilians and
Guatemalans.
But a spokesman for Platforms International scoffed at critics, and
predicted the company's unmitigated success.
"I cannot deal with skeptics," said Gregg Rheight of Genesis 550 Corp.,
formed as the investor relations arm of Platforms International. "I look at
skeptics and say 'I'll meet you at the bank.'"
Whole Lotta Nuthin' Goin' On
Based in Redlands, Calif., but incorporated in the Bahamas, Platforms
International has 25 million shares outstanding, including 21 million in its
public float. The remaining shares are held by the company's officers and
directors and also are free trading, Rheight said. The company will file a
10K with the U.S. Securities and Exchange Commission at the end of May,
he said.
This is not the first time Platforms CEO Howard Foote has been involved in
a company developing this kind of technology. On his website bio, Foote
proudly lists his affiliation with Skysat Communications Network, a
company which is now essentially bankrupt and removed from the
NASDAQ exchange last year due to insufficient assets, capital and surplus.
Foote left Skysat several years ago, returning more than 600,000 shares of
the company's stock when he did, according to a Skysat proxy statement.
And wireless communications is not Foote's only dream for Platforms
International. According to the company's website, Platforms International
is developing a next generation of spacecraft that may replace the Space
Shuttle. Rheight said this is not Platforms International's main focus right
now, but the website makes some pretty spectacular claims. First, it
promises a major announcement March 2 describing the Space Division. If
there was one, someone forgot to post it on the website.
There is a mini slide show that includes illustrations of the Space Ray,
Platforms International's reusable vehicle that takes off and lands like a
plane, doing away with the need for a launch into space. But there are no
more details about the program. NASA, which at this point is still running
the US space programs, is not familiar with Platforms International.
And the company faces formidable competition in this area. Next summer,
NASA will launch a half-scale prototype of the X-33, an auto-piloted
reusable spacecraft. This program has a budget of more than $1 billion,
and if proven successful, is expected to go into private production soon
after testing, according to Tony Jacobs, a NASA spokesman. Although it
takes off vertically, it is a single stage-to-orbit vehicle, which means it does
not use a rocket or boosters to take flight, Jacobs said, and glides in for
landing. The X-33 will also be able to carry passengers, making it a useful
ferry between Earth and the soon-to-be built International Space Station.
Other pages on Platforms International's web site include the Defence (sic)
Division and Operational Sceniaro (sic). This company professes software
technology superior to competitors, and in some cases unique in the
industry. But if these people can't even run a spell check on their
homepage, the Stock Detective would hate to see what their code looks
like. |
