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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Marconi who wrote (9300)	6/1/1999 11:44:00 AM
From: Carl Yee	Read Replies (2) \| Respond to of 18998

A past item in the Forbes Magazine, Streetwalker column, also gave some reasons why IRID was a short. One of the items was the short life of the sats and the high capital needs to replace them. Also, just a plain bad business plan which is getting run over by rapid technology changes and pricing.

To: Marconi who wrote (9300)	6/2/1999 1:54:00 AM
From: chester lee	Respond to of 18998

Marconi and Carl, Iridiots Come Out in Force After Iridium Stumbles By Herb Greenberg Senior Columnist 5/17/99 6:30 AM ET So, last week's Iridium (IRID:Nasdaq) columns turned out to be timely -- luck, I tell ya, luck -- after the company said it had hired Donaldson Lufkin & Jenrette to help restructure its debt. My fave quote, spotted by this column's eyes and ears, Mark Martinez, on Bloomberg via America Online from ING Baring Furman Selz analyst Robert Kaimowitz: "Our model suggests it's heading for bankruptcy, and we've thought that for several months. We just can't do the math where there is any positive equity value.'' Especially when it's valued at $1.5 billion without the debt! So, here the company goes and blows itself up and some Iridiot, with the initials J.F. writes: "Do you enjoy destroying people's hard-earned wealth? Iridium constitutes a large percentage of my retirement nest egg. I bought my position at $65 per share because I believe the company has a bright future. Yet, THANKS TO YOU, I have lost most of my retirement security. Day after day, all you do is pound Iridium. Your hatred of the stock is not only irrational, but mean-spirited and sadistic. Thanks for destroying my life." From another Iridiot (B.P.): "What is your problem with Iridium? If you want to talk about Iridium in a financial forum, that's fine. However, your snide remarks are very unprofessional." Thanks, I do try hard! And from the short-seller who was kind enough to share is Iridium thoughts with this column in the first place (the moral of today's story): "The differential in the price between the different coupons of IRID junk has collapsed, with all of them trading at around 20 cents on the dollar. How should that be interpreted? Prior to today's news, the difference in price was due to the difference in the size of the coupon payments and one's estimate of the probability of receiving payments. "So, if you think you're going to get the next coupon, you'll pay more for a 14% bond than an 11 1/4% bond. However, if IRID doesn't pay any more coupons, the bonds are worth an equal claim in bankruptcy. The fact that they now trade at the same level indicates the debt market's expectation that there will be no further coupon payments. The next payments are in July. Failure to pay would be an event of default." He adds, "I'm amazed that the stock is where it is. [It closed Friday at 10 7/16, down 28%.] At that price, there's still more than $1.5 bil of total equity. Unbelievable." Finally, reader Paul Molling writes: "Iridium: Even their name is wrong: 77 satellites were meant to orbit the earth. The atom with the number 77 is Iridium. But 11 satellites went up in smoke, so there are, in fact, only 66 satellites out there. The atom with the number 66: Dysprosium. Gives you dyspnea, doesn't it?" Oh, yes it does, Paul, yes it does! (Dyspnea; can't help but like that!)