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Technology Stocks : IRID - Iridium World Communications IPO Announced! -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (1783)	5/14/1999 7:47:00 PM
From: Rocket Scientist	Respond to of 2693

Maurice, I also thought and hoped Iridium would succeed, though I thankfully didn't invest in it. It seemed to me that Iridium had some discriminators in its favor that would justify it's planned higher prices: (1) instant global coverage, (2) relative independence from local ground infrastructure, (3) first to market. Add to that the US military as an anchor tenant and the Iridium "story" for investors was pretty good. And DFly and others were right about one thing: Iridium in the end didn't cost significantly more to build than Globalstar will (counting gateways). (You can argue that G* will offer longer life and more capacity for the same fixed cost, and therefore offer greater returns to investors, but if all we were talking about was servicing debt, G* and I+ financing break even costs ought to be about the same.) What seems to be killing Iridium is it's debt covenants, deplorable marketing, and the Motorola O&M contract (600M$/year!!). The one thing that may save it: if Iridium goes belly up, Teledesic/Iridium Next, etc, that Motorola hopes to build will never get public financing and Mot will lose most of the associated hardware business. So Mot does have an incentive to keep the thing alive. I expect a debt/equity swap that dilutes current equity holders (all of them, not just the publicly traded s/h) plus a substantial reduction in the Mot O&M contract could result in a capital and expense structure that would allow Iridium to survive and maybe even compete w/ g*. Current equity holders might be diluted 3 or 4:1, but better for IRID to own 4% of a going concern than 13% of something in receivorship.

To: Maurice Winn who wrote (1783)	5/17/1999 11:48:00 AM
From: Larry L	Respond to of 2693

Maurice: The reasons that I have stuck with I* for so long despite all of the negative info. and the unbelievable stupidity of management is part hard headed stubborness and part ignorance. I bought both I* and G* with the belief that one of the two, possibly both, would make it big and that I would hang on to both until the flames hit the gas tank. My reasoning for this apparent foolishness was that if it went sour the drop would be too fast for me to get out in time. Also, there are a lot of unknowns out there that could possibly pull things out. The fact that the U.S. government has so much interest in I* along with all of the larger investors leads me to believe that there must be something out there. (was that as foolish as it looks when I read it again?) I am not entirely sold on the common belief that G* is a guaranteed winner. G* management has already proven that they can screw up big time. Selecting a launch vehicle with a 25% failure rate to save money was a mistake. The losses due to the delay will far outweigh any possible savings. This was compounded by the fact that G* clearly had no backup plan and was forced to scramble one together. Don't get me wrong, I agree that G* definately has the upper hand at this point. However, they have not yet proven that their marketing plan will work worldwide either. In addition, some of the other problems with I, that all contributers to these threads knew from the beginning, such as inability to penetrate buildings will probably be a difficulty with G also. Bailing out at this point would not alleviate losses by very much. The education I am getting by continuing to closely follow I* is worth the remaining value. There was also not a lot of information, until too late, as to how badly Motorola had planned their marketing of this system. I continue to believe that the basic concept had merit. The few negative comments about how the system functions seem to get more voice than the thousands of successful calls. The system does work. Had it been marketed correctly, I still feel that it would have been successful. Goodfellow and Goodboy seem to enjoy twisting the knife. Perhaps it is just gloating over their self perceived brilliant analysis that they feel the need to continually rub everyone's nose in. What I find interesting is that most, if not all, of their analysis came after I* was already well on its way down. A huge majority of the G* supporters have been quite merciful despite the enormous screw ups at I*.