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

To: Joe Brown who wrote (3548)	3/21/1999 7:41:00 PM
From: RMiethe	Respond to of 29987

JMorgan: We do pay attention to analysts, but when their forecasts shift some 300% in 6 months, as in this case with Iridium, we begin having doubts about the analyst. Wouldn't you? I remember, apropos of this SoundView Iridium report, Rick Whittington from Soundview from 1992-'95 and his projections on Micron Technology (MU). He was right for a while, and then the floor fell out from under him. With a price projection of $175 for Micron which he made for Micron when it was about $85/share, the stock dropped to $16 1/2 (33 pre-split) before it started to move back up. (The exact share price at which he made his $175 projection may not be absolutely correct, but the magnitude of the directions, and of his mistakes, is pretty much on target). Whittington is no longer at Soundview... No-- institutions do not pay the attention to analysts which you think they might. We are aware of what they write but not wedded to what they write. Here "till debt do us part" is not a good thing. Hedge funds may be wedded to analysts' projections, day traders may, but not money making institutions. Especially if the long-term is the view. There is that old story about Warren Buffet asked by a Wall Street broker how quickly he might "need" his firm's analyst report on Coca Cola. To which the oracle of Omaha is said to have responded, "sometime in the next few months is fine with me..." The price comments about the regional telcos raising the Globalstar base price per minute of usage comes directly from Bernard L. Schwartz at a conference call he held some two weeks ago with institutional investors to which I listened. He had made the same statement at a dinner for major institutions that was held in early January in New York City. A reply from Bernard Schwartz to a letter to him on the question, I think, could give you the evidence you want for the statement. I stand by it. As for my citing Defense Daily and Aviation Weekly comments on Iridium, I suggest you read the last few weeks of the Defense Daily publication especially and the comments AirForce personnel have made there on Iridium. Their statements are there. The projection that Iridium would sell the military 200,000 phones over time is mine, as I wrote in the post. I believe given the US military's desire to have quicker contact in the field among its forces and with lost personnel the 200,000 number is reasonable. You are obviously aware of the public statement that the US Military will spend $100 million on Iridium services over the next 4 years. Somehow, I don't think 686 phones are going to run up a $100 million phone bill. If Iridium is used to the extent by the military that it appears it will be, one can have confidence in saying, as I did, it was built for the military. It is no secret that the military has been interested in Iridium for quite some time, in a phone system that would always be available all over the globe in case of a national outage. The difference between the military and the "global traveller", is that the military has a larger base of funds, to put it mildly. Calling my comment on its military ordination "far out" is surprising from someone who did not know that Globalstar telcos had raised its base user per minute of usage price, or that Iridium has received a $100 million commitment from the US military. As, then, for Edward Staiano's positive comments about Iridium all along which you mention, if someone had assembled the marketing effort for it the way he had, and the way his Board of Directors allowed it to be formed, I think others may have had question marks as late as a year ago on how the consumer was ever going to be sold on the service. I was told just last week by its Investor Relations liaison that to change various marketing initiatives (which it knew it had to and which it knew should never have been implemented) the Iridium Board had to approve the changes! Unbelievable. Shouldn't Iridium have a CEO who can make that decision himself? With the proposed changes in marketing and the US military becoming a customer, Iridium will turn it around (my opinion). Sprint shortly will be selling the service, and that will give a good indication of how to market a technology. But this is a Globalstar board, not one for comments on Iridium anyway.