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

To: Rocket Scientist who wrote (4436)	5/3/1999 1:45:00 PM
From: Goodboy	Respond to of 29987

Elegant simplicity is the best description of Globalstar's financial structure. Iridium's structure is complex (especially in a bankruptcy or reorg) and ripe with conflicts. Why doesn't the equity of Iridium reflect this? The answer is that the holders are mostly retail investors. There are no major institutional holders of Iridium stock nor can you find any significant borrow to short it. The bonds have been crushed beyond belief. Over the past 2 weeks, the bonds have gone from over 50 cents on the dollar to around 30 cents on the dollar. These sophisticated high yield investors who have studied the debt covenants, the bond indenture and the position (strength) of Motorola currently beleive that there is a high risk of the bonds being worth less than 50 cents on the dollar. If they are wrong by a very wide margin, than the bonds are worth 70 to 90 cents on the dollar. Those poor equity holders don't realize that means equity is a zero. They beleive Motorola will save them. Sad. I do agree with you on demand and usage. I thing a large market from many areas will emerge for the Globalstar system. Right or wrong, I am holding off to buy Globalstar until Iridium's fate is clear to the street. Of course, Globalstar was a great trade for those that just bought it down in the low teens. I am a longer term investor, buy I would like to buy at the most opportune moment. I beleive that will be sometime this summer or early fall. As I have bet against Iridiums success (especially under their current capital structure), I will bet for Globalstar's success. As for the differences in technology and what vulnerabilites might come into play over the coming 12 months, I will let time answer that question since there is no way I can validate my position without spending and posting a massive amount of aquired information and data. I will be quick to point out the problems as they occur. As a matter of point, the most conservative bet and one I will likely make will be on the Globalstar bonds yielding over 25% (they yield around 21% right now). In fact, a combo of bonds and equity makes for a great risk profile and bet on either a huge success or a medicore success. I don't think failure (Iridium style) is in the cards, thus this would be the right way to play on a risk mitigation basis.

To: Rocket Scientist who wrote (4436)	5/3/1999 1:56:00 PM
From: Jeff Vayda	Read Replies (2) \| Respond to of 29987

RS: Slow day on the thread, and a slow day here at the Space Center. To comment on you observations: 1)Demographics: I agree there are plenty of people waiting to get service. From personal experience, the islands of the Caribbean are in dire need of expanded coverage. You could get G* to break even with the year round business people and the part timers on vacation alone. 2) Early adapters: I would take a slightly different stance here. I believe it is very important to get the phones to the early adapters. These are the people who will show off the phones. They are the ones that will talk your ear off about how great the system is. They are the ones which will push the limits and test the system. They are the ones who will get the word out to the multitude of people who are too busy to realize there is a better system out there. They, in many cases, have the ear of the people who can make volume buys. I would not classify myself as an early adapter but I have been responsible for the purchase of several Qualcomm phones (which were not available through the local service provider) and I bet I could sell the same people some G* phones. I have also been responsible for several G* buys (which, by the way, have not done that well to date :-( My point being, exposure is good. I dont think the institutional buyers will result in the maximum (early) exposure of the phones. 3) Fixed Terminals: Disagree to the max here. The local service providers can expand their coverage just by dropping a booth, or a cell tower. It seems to me that this is the fastest way to say to the government (which is subsidizing the cost in many cases) we have reach town XYZ. Then they can come back and ask for more money to expand service when the locals see how nice it is to talk to the relatives. Again you need to look at G* as a supplement to the existing services offered by the service provider. Sure other systems may be able to service the village phone cheaper, but how many service providers are going to get in bed with two satellite operators? Not too many I would wager. 4) Bat People: an argument could be made that MOT planned this as a contingency all along. I* will be around if for no other reason than government use (both US and others) Technically the system is just too neat to go away, costs are not much of a concern for those who print their own money. 5) Competition will be there. Too many people very smart people have put money into the systems. Even if current numbers are off by an order of magnitude, there will be enough business for several outfits to make money. 6) Future: It is bright indeed. Jeff Vayda