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

To: John Stichnoth who wrote (4844)	5/21/1999 10:27:00 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 29987

John, Cricket has an 'eat all you like' plan. Prices will come down. But the assumption that Globalstar prices should be higher than terrestrial is false. Since the total consumer benefits are lower with Globalstar [1812 handset which doesn't work inside and has bad talk and standby times], the minutes need to be cheaper, not more expensive than terrestrial. From the point of view of the customer, they don't care whether the call goes through space or a nearby basestation. They add up benefits and costs. There is no reason, other excessive handset demand, for minutes for Globalstar to be more expensive than terrestrial. If demand for handsets is 'excessive' then the three suppliers will put prices up and go berserk increasing production. Since we KNOW we have a vast oversupply of minutes starting NOW, we need to price them to move them. The Globalstar price should be 'what the market will bear', not what limited cover terrestrial minutes are selling for. It seems that the Globalstar share price is a vote for 'the market is not going to bear very much'. If the AirTouch theory 'we can sell them like hot cakes at $1.50' is correct, then how come Globalstar shareholders are pricing the stock at a derisory $20 per share. At 50c per minute, Globalstar shareholders will be super rich. $5bn per year income on a quarter million shares = $20 per share x 20 P:E = $400. If AirTouch believes their $1.50 per minute, they should be buying Globalstar stock. Or ordering a million handsets. There seems to be a gap between statements, theories and reality. Iridium is real. I hope Globalstar doesn't continue too long down the same path. "Buy the 1812 version of Iridium, with the self-telescoping artillery aerial. Only $1500 per handset, only $100 per month, only $2 per minute, standby time all morning AND afternoon [if you don't talk]" No wonder they will order some later! Maurice PS: Government Health WARNING: Don't depend on the Globalstar handset on long hikes because you can't be contacted and the battery will go flat if you leave it on.