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

To: Andmoreagain who wrote (4617)	5/15/1999 1:16:00 AM
From: RMiethe	Respond to of 29987

No hate mail from me. On your point about Globalstar needing 1.3 million subscribers-- that is of course at 120 minutes/month. However, there are indications that it is not the subscriber number that is needed to be considered, but the actual number of minutes various businesses will use off the Globasltar system. This issue was brought up by Jean Claude Legarde of TESAM on the Globalstar CC a few weeks ago, and it has been reconfirmed in conversations with Elsa. 700,000 users, e.g., at 300 minutes/month change the subscriber number need dramatically. For myself, I have never believed Globalstar would get 3 million users, but I do believe a 700,000 user number has plausibility over a two-three year period. Pure opinion, of course, (I am the first to admit it) but with Air Touch and Vodaphone being both resellers and the combination a substantial investor, I think the opinion has some backing. I still believe actual personal usage numbers (as opposed to business usage) will depend heavily on China Telecom's participation. But that is just my unverified opinion. Network Vodaphone in Sydney NSW does think that Globalstar is going to be an important part of its telephony system, and some have said the best thing that happened to Globalstar is that Vodaphone bought Air Touch such that Vodaphone-AirTouch now have a much bigger stake in Globalstar's success, than they did separately. On the Globalstar payment of debt after it starts operating: I would not be at all suprised if Globalstar issued secondary equity offerings over time to pay off that debt, and not issue new debt to cover the old debt. I wrote a few months ago that this is what Ted Forstmann did with General Instrument back in the late 1980s. Company had $4 billion in debt, he got Donald Rumsfeld to run the company, and over time all the debt was paid down through equity issuances (because of the company's great earnings growth for some three-four years-- ironically, once Rumsfeld left, the earnings growth flattened). The shares of General Instrument continued to rise after each secondary, by the way. As for brokerage firms having "buy" ratings on Globalstar for the purpose of participating in the next $600 million tranche: I could have seen that as a point two years ago, but now that the Iridium difficulties are known, having a "buy" recommendation now on Globalstar I don't think fools anyone. In listening to the CC with TESAM, Elsacom, AirTouch I did not get the impression the participants were just wasting the listener's time with tales and bluster. They seemed pretty convinced that they had a viable product in Globalstar, and explained how they saw it unfolding among business users (which sort of users I have described in prior posts) and Air Touch especially on individual users. While because of its investment Air Touch, one might say, may have been inclined to "fudge" a bit during the conference call [I am not saying they did], TESAM and Elsacom's investment are not that pronounced in comparison with Airtouch Vodaphone (combined), and Qualcomm's. But they said essentially the same things Air Touch said. That their financial loss would be so much less than Air Touch's in case Globalstar was not doing well subscriberwise seems to indicate that it would not make much sense for TESAM or Elsacom to just spin a BLS yarn. It's probably not a bad idea to review the notes on that CC from time to time if one needs to revalidate possible reasons for owning Globalstar. Celstar is the Latin American and American agent for Globalstar phone sales, and within four months one should be able to get from them in Indiana how their sales are looking going forward.