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

To: Maurice Winn who wrote (3525)	3/20/1999 9:20:00 PM
From: Goodboy	Read Replies (1) \| Respond to of 29987

Iridium is headed for a painful restructuring some time this year. Equity will be mostly wiped out with stratgic equity partners being thrown a bone in the form of some new equity or warrents. The battle will be between the bank debt holders (secured by assets), the bond holders (only protection is their indenture terms) and the largest creditor, Motorola (who has several conflicts of interest with the other parties as system operator and holder of maintenance/operation contract, of which nearly 1 billion in payments has been deffered to 2001). I think Globalstar is the ultimate long term beneficary of these coming events. However, an Iridium bankruptcy would likely close the captial markets to other companies in the sector (or at least raise the financing costs or limit the amount that can be raised). This would be bad for ICO and Globalstar. Globalstar stock will likely move down on the Iridium troubles for that reason. That should create a tremendous buying opportunity for Globalstar investors. In addition, Loral would likely provide needed capital for Globalstar if the capital markets are unwilling to do so. While good for Globalstar, that wouldn't be good for Loral, since they need capital to expand their own businesses. It seems Globalstar will be a huge winner when this all shakes out going into 2000. Timing will likely be everything, but 1 year from now it will likely not matter if you bought at $18 or $10. The lessons learned from the Iridium project should be pondered by others planning ambitious satellite ventures (ICO, CD Radio, etc). Any positive events for Iridium (if any happen) will likely be opportunities to short the stock. It is likely a zero and the bondholders should probably be more worried than they are. Technology will play a part in the final stages of Irdiums pre-bankruptcy problems (system degradation, satellite failures and shortening of the arrays average life). I suspect the media will pick up on this in the second half. The Globalstar service launch will be the last nail in the Irdium coffin (not the service, but the financial structure).