Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Valueman who wrote (4266)	8/14/1998 2:57:00 PM
From: Valueman	Read Replies (3) \| Respond to of 10852

It is time for one of those biennial, semiannual, every other fortnight back of the envelope valuations. Here we go: PER LORAL SHARE G* $8.14 SS/L 6.00 Skynet 9.43 Satmex 2.64 Orion 3.96 Total 30.17 This is using G* price of 22, and giving it strictly a value based on its present trading price and Loral's ownership. Skynet/SatMex/Orion are valued at 10X 1999 EBITDA, a common valuation technique for this type of operation. In the case of Skynet, my numbers were below Loral's own expectations because of the slowing of launches of Telstar 7-9. SatMex is adjusted for the 49% stake held by Loral and does not include the management fees. So, we are trading at 80% of fair value, and this gives ZERO value to management, the future success of G+management fees, CD Radio stake, Skybridge stake, Mabuhay transponders, Cyberstar, G service provider potential revenues,EuropeStar, $700 million cash, orbital slots,payoffs from Chinese for launch vehicle secrets(couldn't resist), and whatever else is coming in the way of acquisitions, partnerships, etc. Another fact to look at is what happens to Loral as G's price rises. At a G* price of 64, Loral's stake is equal to its current stock price. Think about that. Those of you who are mega-bulls on GSTRF and see 100-150 in 2002, think about Loral's price at that time. At 100, Loral's stake is worth 37. Based on that number alone(assuming all other parts of Loral disappear), my handy dandy TI computes an 11.43% annual return. Let's reduce expectations to a G* price of twice present(44) in 2000. Loral's cut is 16.28 per share. If we only add the value of those entities listed above, and assume no change in the numbers(horrible assumption I know), the value of Loral is then 38.31, for an annual return of 26.34%. I'll take it.