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

To: RMiethe who wrote (4630)	5/15/1999 3:41:00 PM
From: Goodboy	Read Replies (1) \| Respond to of 29987

You are right on something not jiving. When was the last time you saw this many law firms circling in the water? One can only truely understand all this by reviewing the financial structure, documents (O&M contract, s-1, debt covenants, bond indenture, strategic investor stakes, total Motorola exposure both current and future) and Motorola potential profits from O&M contract and hand set sales. If you do all this, the picture will become clearer. I am very interested in the coming battle between bondholders and Motorola for the new equity in the company. The only good money left in this thing is the bank debt (800 million)that is secured by assets. If they (and I am no bankruptcy lawyer) go after the assets, it is all over. For that reason, they will be made whole and the battle for equity and how to exploit and create value from the Iridium system will begin. That will involve a lower O&M contract price (not possible if sat failures increase, but the current price seems way high), lower hand set prices (you know their cost on an Iridium phone is well under $700 smackers), new price points per minute and a revamped distribution plan and partners. Don't sell the media short. They have played a big part in keeping corps and individuals from buying these phones or signing deals. They are also instrumental in focusing attention on a particular issue. I think it will become the new Iridium pricing and service along with its competitive impact on Globalstar. Beyond all the other advantages Globalstar has, price per minute and hand set costs are two of the largest. That may go away. The positive spin for Globalstar is that the Iridium system is a wasting asset with no chance for a second generation (unless it is owned by Teledesic or others) and in my opinion, a system whose perfomance will progressively degrade for all those reasons that djane's Yahoo repost proclaimed and many more. I will buy Globalstar some time in the next 4 or 5 months at a much lower price than today with a 2 year holding period and an expectation of a 5 bagger. Also, if sat finacing dollars dry up (they already are), I think there are a few very liquid deal makers out there who would provide the capital under terms favorable to themselves. If that is the case, than I would be concerned that Globalstar will suffer some further dillution (but not a large amount). That is ok with me because all this stuff would have played out before I go long. This is like a perfect hand off from Iridium short to Globalstar long. I will be a buyer of Globalstar within 8 weeks of Iridium common dropping below $2. I am not being negative on Globalstar, although I would have been selling it above $20 if I were an owner. I am just reflecting the realities of the market and my prediction as to how events will unfold. Iridium has read like a book for me up to this point and while I have no where near as much tech or industry stat savvy as most of you, I do pretty good research and my contacts help out a lot as well. As always, I compliment this thread for its level of information and the quality of the posters. It has been very valuable.