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Technology Stocks : Loral Space & Communications -- Ignore unavailable to you. Want to Upgrade?

To: JMD who wrote (5681)	4/4/1999 2:51:00 PM
From: Pseudo Biologist	Read Replies (1) \| Respond to of 10852

JMD, a related point is articulated in a recent piece by Cramer: thestreet.com The article focuses more on how the "traditional" players that have seen their turf chewed upon by the Amazons and Yahoos of the world (say, Barnes and Noble, Wal-Mart, the big media companies) can defend themselves by essentially spinning out "web" units; this raises cash and to some degree dilutes the internet universe. Paraphrasing from the article (link may be good for TSC subscribers only): <<What prevents a major outfit with assets in cable, movies ,etc that has a small Web division, from killing two birds with one stone by issuing millions of shares at 15-40 bucks in their internet unit? In one move, you would: (1) grab all of the capital that would have been used for another umpteen companies (2) you would get enough money to actually do something "interesting" in the internet arena, and (3) you now have a "currency" that would allow you to make dilutive acquisitions that would not damage the mother ship>>> Following your analogy, this type of strategy may very well apply to the fiber vs. satellite arena. Now, where is that "small internet/web division" one can hype-and-spin for Loral? -G-

To: JMD who wrote (5681)	4/4/1999 6:23:00 PM
From: kitterykid	Respond to of 10852

To Mike Doyle - You make some salient and perceptive comments regarding "bubble" stocks with rich currencies. On one hand the internet companies - like those that have $13 Billion market caps trading beanie babies and baseball playing cards - generally have tiny public floats because most shares remain in founder and employee hands. Yes, they can buy each other - using their inflated wampum only - and we have seen that phenomenon growing in recent months. I don't see them buying big companies with real assets and liabilities without the risk of pricking their own bubbles! On the other hand you have hit the nail on the head regarding the rich currencies of what may be called the new "nifty fifty" or perhaps "nifty ten" - the Microsofts, Ciscos, MCIWorldcoms, Dells, GEs, Lucents, etc. My personal fear as an investor in QCOM and LOR is that a Lucent buys Qualcomm or a GE buys Loral using their own rich "wampum" (Perhaps the great Warren Buffett himself did that last year with his acquisition of General Re?!?). As a former Qualcomm and Loral shareholder, I would regret greatly feeling forced to sell Lucent and GE because I thought their stocks were grossly overvalued (which I do!) With recent events influencing QCOM stock price I am not so worried as I was a couple of months ago about the Q being acquired at distressed levels. I don't share this feeling regarding LOR.

To: JMD who wrote (5681)	4/4/1999 6:53:00 PM
From: Bernard Levy	Read Replies (2) \| Respond to of 10852

Hi Mike: My point was that shakeouts are extremely beneficial for the survivors. If one looks at the picture of satellite telephony and data LEO and MEO constellations, there is now a good chance that I* will be bankrupt within a year, and that ICO and all other constellations will not be built, at least for a very long while. This means that if G* makes it (we still don't know for sure whether it will have a market), it will be vastly profitable. In fact, to a large extent, the future of satellite telecommunications rests on G*'s fate. At the opposite end, the huge valuations awarded without any distinction to all fiber companies encourage overbuilding, which in the long run means very poor investment returns. You are right in indicating that many of the overpriced companies can use their shares to by assets cheaply. In the case of Internet companies (Yahoo, AOL, Amazon), they are essentially buying trash with trash, so nothing of value will emerge from these combinations. In the case if the fiber companies, we have recently witnessed some interesting takeovers (takeover of LCI by QWST, even though LCI was much larger in terms of revenue, and takeover of FRO by GBLX, even though GBLX remains to a large extent a project in its infancy). Both of these takeovers certainly strengthened QWST and GBLX, but they did nothing to slow down construction by other competitors (LVLT, WMB, NXLK, ...) In fact, they probably encourage the creation of new competitors. Best regards, Bernard Levy