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.

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

To: djane who wrote (3102)	2/23/1999 9:47:00 PM
From: Drew Williams	Read Replies (1) \| Respond to of 29987

<<On the service side, we have seen no reductions yet. Retail pricing for domestic calls in major markets remains around $1.50 to $2.25 per minute. International calls typically fall in a $4 to $7 range. The company expects this pricing to yield $2.10 per minute to Iridium. Our models assume 40% lower levels of $1.25 per minute, falling to below $1.00 within several years. [G* costs/pricing are much lower]>> I think the people from Merrill Lynch and Barings must be looking at different companies. Barings said that Iridium needed to get $1.40 if they sell all their minutes. Of course, neither Iridium nor Globalstar will do this. I do not know what the real number will be, but the kind of numbers I see in cellular / PCS systems has them running around 25-30% of theoretical capacity so they have enough overhead to allow for peak usage, ie rush hour, etc. So, the real amount Iridium must receive per minute of actual time sold must be some multiple of $1.40. 2X? 3X? 4X? Let's assume 3X Baring's numbers, giving us $4.20 for Iridium and $.42 for Globalstar. Hmmmm? That $.42 is getting pretty close to the $.47 Globalstar is supposed to be charging wholesale, so is the Iridium number realistic, too? This math is not too difficult. I can be an analyst, too. By the way, my previous post did not mean to imply there is "no" market for products at 10X their competition's price (as one e-mail misinterpreted.) If this were true, Mercedes and Rolls Royce would have been out of the car business a long time ago. Nor am I saying there is no market for Iridium's services even at these or higher prices, nor am I saying it is not possible for them to be profitable and successful. It just isn't as broad a market as Globalstar can enjoy at much lower prices, and they're going to have to work their marketing butts off. I wish Iridium well, but have not invested my money there. By the way, my boss and I are going to Cherry Hill Friday morning in his new BMW 740i, but we will not be any faster, warmer, or more comfortable as we cruise down the Schuylkill Expressway at 20-30 rush hour mph than we would be in my 1991 Mercury Sable. We will be more stylish and may be slightly safer, as the BMW has eight airbags and the Sable has only one.