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

To: djane who wrote (3405)	3/15/1999 6:56:00 PM
From: djane	Read Replies (3) \| Respond to of 29987

Interesting analysis of G/L discount factors (via g* yahoo thread) Top > Business and Finance > Stocks > Services > Communications Services > GSTRF (Globalstar Telecommun.) Help - Add to My Yahoo! - Sign Out Stock Price Discount Factors? by: AR2BW (50/M/Orlando, FL) 4931 of 4931 It seems to me that the market is discounting two factors in LOR and GSTRF: Launch Deployment and Phone Subscription risks. 1. The Launch deployment discount seems to be proportional to the Prob. of launch success (given about 90% prob of success/launch. This might mean that this discount factor is about (.9)^4 = .65 or so at the moment for this risk. (By the way this means that there appears to be a 65% chance of reaching 32 Sats on orbit with no failures.) 2. The recent IRID(F) market demand issues are raising questions about if enough phone subscribers can be found. Thus another discount of maybe 50% which is constant for now. (unless something happens with IRIDF or GSTRF early handset sales.) Thus the total current expected value discount appears to me to be about .65.5 = .33 right now on both LOR and GSTRF stock value. Given this model I'd expect the stock to raise slightly with each additional launch (k) (i.e. .5(.9)^(4-k)) until late summer when all of the 32 sats are up and only the subscriber risk discount will apply (50%?). This discount will only disappear when subscriber results are known (Dec 99?) and the business breakeven risk is lowered. Given all of this GIGO math, I'd then expect about $25-$30/share by September at the beginning of operations from current levels and $55-$60 by year end. Interesting that I was able to hit the analyst's target price ranges with this argument. Any other opinions? Posted: Mar 15 1999 5:40PM EST as a reply to: Msg 1 by YahooFinance

To: djane who wrote (3405)	3/17/1999 1:02:00 AM
From: djane	Respond to of 29987

I was thinking about the following quote from the LA Times article Still, it pays to read the fine print. Some plans come with high monthly fees, some waive extra charges only in cities in which the company owns the network. Others may drop roaming charges but not long-distance or extra toll costs or may require subscribers to buy a special phone As we all know, even in the US and Europe, there are huge areas without any coverage. And, if you go outside your local area, there isn't coverage or are much higher costs or roaming fees to use another network. In that vein, I would add another factor to the discounting analysis in the last few days. Wall St. is confused by the latest ads with very misleading cell carrier "state" or "national" plans with supposedly no roaming charges, etc. If marketed correctly, I believe VOD/ATI and other SPs can clean up by guaranteeing true, no bullshit state/national coverage via G* mobile satellite without all the qualifications, footnotes, fine print, etc. A very nice selling point.