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

To: Maurice Winn who wrote (4149)	4/24/1999 8:01:00 PM
From: CommSatMan	Read Replies (1) \| Respond to of 29987

Thanks Maurice, you are helpful as always. I think that you have hit the nail on the head with regard to battery capacity and geographic spread. I was just looking for some assurances that some neutral party had evaluated the data and supported the claim. CSM

To: Maurice Winn who wrote (4149)	4/25/1999 1:14:00 PM
From: Goodboy	Read Replies (1) \| Respond to of 29987

Something that is often overlooked in comparing Globalstar to Iridium is the major differences in the capital structure. As we know, Globalstar has a relatively simple structure with Loral the largest equity holder. Iridium however has a horrible and complex arrangement when you consider that they will have to resturcture the company. As with any company, equity will be impaired, if not totaly wiped out. The problem here is that the IRID public float is only a small fraction of the equity ownership. The other equity holders are for the most part strategic investors. They were insturmental in both financing and opening foregin markets to Iridium from a distribution and transmission standpoint. This will be very ugly when it happens and Motorola is the only party who can walk away unharmed. It has become clear that big Ed was about to be given the boot, but choose to resign instead. It is likely that his departure will clear the way for the coming restructure. His purchase of IRID stock shows he had no intent on leaving (unlike Grant, who sold his stock after defending the company for weeks). Between the bank debt, Motorola guarantees, bond debt, Motorola MSA liability and the strategic equity investors, this thing is going to be a mess. With the coming capital call (which will be for Motorola along with the other strategic equity investors) you have your catalyst for the restructure. A resturctured Iridium can compete more effectively and certainly make their minutes more affordable to the potential system subscribers who demand the full (oceans, etc) coverage and will pay a premium over Globalstar. The resturcturing will not allow for cheaper phones (subsidy won't happen) nor will it expand the number of minutes available for sale. The media, uncharacteristicly, has chronicled this story well. It is likely that Iridium's restructuring will cast doubt on the launch of a second system and potential customers will question if they should commit to a system that may not exist 3 or 4 years from now. It will also be clear later in the year that Iridium's technical problems are far from over ( I would bet their is at least one, maybe two new sat failures). Iridium will end up a financial disaster. The question should be directed at the impact to Globalstar. I say it will be capital shortage, guilt by association (does a big enough market exist) and execution anxiety. Those factors, right or wrong, will bring down Globalstar's stock price. I beleive (and I am prepared to put my money where my mouth is) that Globalstar will be a tremendous value. In the meantime, I am nuetral on the stock (although I recognize that several great trading opportunities have materialized and will materialize going forward). I have made no secret of the fact that I have been short Iridium for some time and covered prematurely (low twenties) some of my position. I didn't even expect the melt down to happen this fast. In fact, I can't borrow any stock to bring my position back to where it was. I am planning on buying Globalstar bonds around the time that Iridium announces their intention to restructure. Then the equity some time after that. After listening to last week's call with Airtouch and company, it should be obivious that they have the right model to succeed and the flexibility to create demand with pricing. I suspect Globalstar stock will be a home run in 2000. More money will be made in Globalstar equity than was lost in Iridium equity.