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

To: Jeff Vayda who wrote (4341)	8/25/1998 2:16:00 PM
From: Valueman	Read Replies (2) \| Respond to of 10852

Subject: Re: Stock prices & price projections Date: Tue, Aug 25, 1998 12:41 EDT From: Readware Message-id: <1998082516411100.MAA16835@ladder03.news.aol.com> On an email: In June 1997 we projected a $24/share price target for LOR. It reached that in Sept 1997, and backed off after the delayed October launch. (We had originally projected a $26 share target for LOR in 1996, but dropped it $2 in June 1997 when an expected launch in July 1997 was moved to Oct 1997. For 1998 we had a $36/share target for LOR. Intraday this year it reached $34 5/16. At the time the projection was made the stock was $14-- the projection was made in 1996. For 1997 we projected a price target on G* of $49/share. It exceeded that price. In 1998 we projected a price target for G* of $71/share. It reached $74 3/16 intraday. Both projections were made in 1996. I know of no one who came as close as we did to the projected prices. The markets traded on their knowledge of those business plans as then stated and discounting prices according to the standard discount models used. No analyst I know of made price projections for LOR in 1996. It appears only this year they have, and their year end 1998 and 1999 prices are fairly close to what was posted in 1996 by me. I do think that analysts tend to misunderstand the fluidity of launch scheduling, but overall seem to get the business opportunity/outlook correct. I certainly have not changed my outlook. In fact since 1996 the outlook for Loral has, in my opinion, gotten better-- significantly so. The company's acqusition of Orion was an important milestone which the market currently does not acknowledge. I do not think any observer in the satellite industry ever expected a Loral ability to accelrate its internet business the way it did in acquiring Orion. The company further merits kudos for a relatively flawless execution of its Globalstar businessplan, begun in 1989. The market, howver, has now completely discounted that accomplishment. Hence the current G* price. Because of the Zenit-2 launch scenario [the reschedules, not in any way due to Loral], G* investors have been put on the rack. No doubt about it. Since the company has publicly changed its launch schedules a number of times, and which satellites it will launch, it does not make sense now to make estimates on actual numbers for the company until some stabiliity in its businessplan becomes clear. For all one knows, the company tomorrow could make an acquisition, as it has done twice in the past, and nunbers and satellites in orbit would have to be changed again. At $23/share LOR is clearly cheap based on the business it will do next year. So is Globalstar-- probably more so. Satcom revenues should grow from $20 billion this year to over $ 70 billion in 2002. Given the current prices of LOR, Globalstar-- and PanAmsat, as well as Hughes, it is clear that either those revenue projections are disastrously incorrect, or the market has not valued those projections in a normal discounting methodology. The latter is the correct reason. But as I wrote above. I know no none in 1996 who made the price projections we did, and actually see those prices reached, or nearly so, in the year we said they would be reached. In fact, there was no one. Subject: Re: Stock prices & price projections Date: Tue, Aug 25, 1998 14:11 EDT From: Readware Message-id: <1998082518110700.OAA26893@ladder03.news.aol.com> As a further comment on price projections: no pricing model, however disciplined and prescient, includes among its variables "charges of selling secrets to a foreign power" and the effects on the shares of a company vacuously accused of such charges, or "global currency crises". A model takes into account normal business operating variables-- normalcy, or its semblance. Arguably, charges of treason and global currency crises do not meet the description of "normalcy, or its semblance". It is not unreasonable to suggest that both variables have had an impact on the price of Loral.