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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT -- Ignore unavailable to you. Want to Upgrade?

To: Joe Brown who wrote (3076)	2/22/1999 10:14:00 PM
From: Goodboy	Read Replies (2) \| Respond to of 29987

This sounds good on paper, but Iridium is not out of the woods yet on their technology. In addition, Motorola is owed over 1 billion. At what point do their interests align with creditors rather than equity investors? Between the bank debt and Motorola's creditor (and operator) status, the bondholders are in a position to get squeezed. Where does that leave equity? As I have said before, this thing is headed for a restructuring. In fact, you should study the incentives to beat down the bondholders and wipe out the majority of the equity, with strategic investors (gateway operators and such) keeping a piece of the pie. Once IRIDF is nothing more than a bad memory, debt is halved and Motorola, bank and bondholders own the bulk of the equity, then they can sell phones for 1,000 and minutes for 50 or 75 cents. The company could thrive and compete with the intial stakeholders all but wiped out. Lots of conflicts of interest in Iridium. The upside is that many of the parties have leverage, which would bode well for a prepack restructuring. Keep your eye on the trading price of the bonds and the moves by the rating agency (downgrade). That will be your signal that the restructuring is near. This technical default is just a taste of what is to come. Boy you can learn a lot from reading an S-1 and a bond indenture.