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

To: Steven Rachbach who wrote (3416)	3/16/1999 2:32:00 AM
From: djane	Read Replies (1) \| Respond to of 29987

Steven, excellent analysis. One point Unfortunately, the 9+ month Zenit delay has allowed other wireless companies the opportunity to grab customers G might have gotten and build out new systems* I'm trying not to be too boosterish, but I'm not sure I really agree. Satellite mobile telephone service covering a state/nation/worldwide at $.65-$1.00/minute with under $.10 cost -- there will be no competition from 9/99 to at least 08/00 (if ICO gets its financing). I* with its $1.40 breakeven costs, $3000 handsets and high cost/minute is really targeted at a different market. More importantly, given G* distribution model through top-notch service providers (e.g., VOD/ATI), in the last 9 months, the SPs have added millions and millions of new subscribers who are potential G* users. In addition, many areas of the world where G* is expected to do well have better economic prospects (now and 2000-on) than projected 9 months ago. My thesis -- worldwide economic recovery helps G* and isn't reflected in G* share price. And, as Maurice has pointed out, the handsets/batteries/etc. should be improved over what could have been provided 9 months ago. So, my theory is that the 9 month Zenit-induced delay increased G* costs and shareholder dilution, but may have been an unintended benefit for the above 3 reasons. The key is a fast, effective rollout and marketing program. I keep coming back to the 225,000 users to break-even, 1M users to pay all G-1 costs/G-2 constellation, and the rest is...

To: Steven Rachbach who wrote (3416)	3/16/1999 9:12:00 AM
From: RMiethe	Read Replies (2) \| Respond to of 29987

SR: The problem with Loral's price, and not with a discount pricing model, is that Loral never got its satellites in orbit, as it told Wall Street it would. Remember their November 1997 business model? According to it, by now Orion 2 and 3 should have been in orbit, as well as Telstar 6, 7, & 8. Only Telstar 6 is in orbit of all the GEOsats I just named. Additionally, this year, 1999, Telstar 9&10 were to be in orbit. And they are not, nor will they be this year. The pricing mechanism Readware used is the same used to evaluate Globalstar's price going forward. It's a standard model-- nothing really out of the ordinary about it. Interestingly, while Wall Street believed the Loral launch dates for its GEOsats and for Globalstar, Readware's pricing model worked flawlessly. I remember for 1998 he had projected back in 1997 a price for Loral, based on, as he used to say, "timely execution" of its launches, a $36 price for LOR in 1998. It hit $34 and a fraction-- and then the Globalstar delays started piling up. And Loral collapsed in price, failing to "execute". Blame the company, Steve-- not a pricing model. Had Loral stuck to its November 1997 businessplan-- the reasons for it not being the case are hard to pick out-- that pricing model would probably have come within the neighborhood again this year. Reason: it's simply a matter of doing the arithmetic on a term year of earnings, and discounting to the present. Then, also, pricing models do not take into account charges of treason and conspiracy, yellow journalism and radio shock jock attacks (as I wrote on the SI Loral board) which have eliminated, in my view, an entire class of possible investors in Loral. Who knows what will happen after the Cox Report is issued, whose preliminay presentation names everyone and cites everyplace. Those "things" pricing models just do not pick up. It's not the pricing model, that seems pretty clear.