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

To: DoctorEvil who wrote (3929)	4/16/1999 7:15:00 PM
From: Maurice Winn	Respond to of 29987

ICO, Capacity, fuel and life Early in the thread, I was ranting about the balance between photovoltaic supply, batteries, circuits and price. It looks as though a couple of years later we are coming back to the beginning. Iridium will cut their handset and minute prices to generate some business, while trying to tie people to 3 yr contracts. I doubt they'll find many suckers willing to go with a 3 year high-priced minute contract, even if the first year is half price given the huge surplus of minutes already in space and more to come with Globalstar and ICO. ICO is planning to get money from innocent, credulous, naive, gullible shareholders in a rights issue. They will lose their money or at best have a rotten investment returning very little. ICO is planning a $5 rights issue to raise about $1bn from suckers to keep the contractors, until February, in the manner to which they have become accustomed. This is reminiscent of Eurotunnel. Eurotunnel was an uneconomic project which was promoted as a make-work scheme by the lead contractors. Banks loaned heaps, shareholders put in heaps, the contractors made heaps, the shareholders lost their money, the banks got most of theirs back, the tunnel users did just fine as did the contractors. ICO is the same. There is no economic market. But the contractors want to get money so they promote the scheme. Shareholders put in a couple of $$billion. The banks figure that income will cover at least their loans so they should be okay, but they don't really understand what's going on so probably won't get a return on their loans. Because the investors are getting a bit nervous, the contractor puts up a show of confidence in the project by buying some stock. A trivial amount of stock. The amount of stock they are buying represents a pathetic discount on the total value of the project. Even if they lose all that stock value, they'll be well covered by construction income. With luck, the naive stockholders, who will only get money from income, with be suckered by the contractor putting in money and will go ahead and pay the rights issue and any other capital requests. 10 ICO satellites, 10,000 km high, starting June 2000, will add many billions more minutes to be sold. Low quality minutes because of the altitude and voice delay. All the minutes from Iridium, Globalstar, ICO and what's their name will need to be sold. The more minutes there are, the lower the price will be. Sure, the target markets don't overlap totally, but the minutes are mainly fungible. They will go down in price together. The lowest cost, highest quality system will be the survivor. That's Globalstar. Iridium is stuck with high costs. It's a doomed system destined to live out 5 years or so then die without making a worthwhile return on investment. Motorola can't 'rescue' it. Sure, they can maintain it in operation by taking it over with the loss of shareholder and bond-holder equity. They can and will put in enough capital to keep it going which will maintain their handset sales. Bad luck for the other investors because Motorola won't be giving THEM the money - they'll be diluting them like mad. ICO will go ahead as a make-work project for the bureaucrats of Inmarsat and the contractors. The shareholders, bond-holders and taxpayers will be out of luck! 10,000 km is a long way to send a signal compared with 1414 km for Globalstar. Sure, the minutes might be cheaper, but Globalstar minutes are going to be as cheap as it takes to sell them all. Globalstar, especially with the second, third and fourth constellations will have a LOT of high quality minutes to sell. ICO will be skooshed by competition. The fantasy that there was a huge market and anyone who fired a few satellites into space would get rich was always a fantasy though many chose to ignore the reality that competition would do the normal thing = cut prices and increase quality. ICO cannot compete. They will lose their shareholders money. Maurice PS: Sure, Iridium and Globalstar are also contractor-led, make work schemes. There is nothing inherently wrong with that, it just means that shareholders need to have their eyes wide-open. When the competition gets serious, there will be winner and losers. There's no point investing in the losers. There might not even be a point in investing in the winner because the shares might be too high in value. The best thing to do might be to invest in a biotech.

To: DoctorEvil who wrote (3929)	4/26/1999 12:32:00 AM
From: Jon Koplik	Read Replies (2) \| Respond to of 29987

Re : beginning and ending capabilities of solar cells on satellites. (Before I start blabbing, I just want to say : Wow -- some of you guys over here on the GSTRF thread are really smart. I am so used to the phrase "rocket scientist" as used on Wall Street (someone who can actually "do" advanced math (?)). You guys are rocket scientists !) Anyway, this business about solar arrays slowly getting damaged by "space junk" collisions reminded me of James Bond movie type silliness. Do we have to worry that Globalstar's competitors have ion beams (or whatever) aimed at G's satellites ? Jon.