GSAT Trade on Jul 6, 2020 15:31 from murphyrob9: Tradervue User Stock Trades.

RISK REWARD ANALYSIS
DATE: 07/06/20
TICKER: GSAT - Globalstar

Bottom Line Up Front: (BLUF): A white house executive order signed by Trump calls for the removal of all foreign SATCOM and Telecom companies from the United States. Provides a good opportunity for significant movement in the GSAT and their competitors.

Background:

Globalstar, Inc. (“Globalstar” or the “Company”) provides Mobile Satellite Services (“MSS”) including voice and data communications services through its global satellite network.

Analysis:

They currently provide the following communications services, which are available only with equipment designed to work on our network:

• two-way voice communication and data transmissions using mobile or fixed devices, including our GSP-1700 phone, two generations of our Sat-Fi®, the Sat-Fi ® Remote Antenna Station, and other fixed and data-only devices ("Duplex");

• one-way or two-way communication and data transmissions using mobile devices, including our SPOT family of products, such as SPOT X®, SPOT Gen3® and SPOT Trace®, that transmit messages and the location of the device ("SPOT"); and

• one-way data transmissions using a mobile or fixed device that transmits its location and other information to a central monitoring station, including our commercial IoT products, such as our battery- and solar-powered SmartOne, STX-3 and STINGR ("Commercial IoT").

In the United States, the Federal Communications Commission ("FCC") has authorized Globalstar to operate our first-generation satellites in 25.225 MHz of radio spectrum comprising two blocks of non-contiguous radio frequencies in the 1.6/2.4 GHz band commonly referred to as the "Big LEO" Spectrum Band. We licensed and registered our second-generation satellites in France. We also obtained all authorizations necessary from the FCC to operate our domestic gateways with our second-generation satellites.

They have an enormous business pipeline over the next few quarters.

Possible Catalysts:

• White House executive order to remove all foreign SATCOM and Telecom powers from the United States
• Heavy insider buying with executive owning over 65% of shares
• 22% of shares owned by institutions
• Earnings 8/6/2020
• Conference call July 15th

Possible Acquisition/Buyout/Merger Target?

• Rumors are circulating that they are entering into some sort of partnership with $DISH

Possible Risks:

As of December 31, 2019, there were 535.5 million shares available for future issuance (of which 100 million are designated as preferred), of which approximately 233.4 million shares were contingently issuable upon the exercise of stock options, the conversion of convertible notes and the vesting of restricted stock awards. On February 19, 2020, Thermo converted the entire principal amount outstanding under its 2009 Loan Agreement resulting in the issuance of 200.1 million shares of common stock; these shares were included in the contingently issuable count as of December 31, 2019.

1. Hardware failure. Orbiting satellites that experience technical difficulties pose a risk as there is no feasible way to repair them if they become damaged.
2. Costs of obtaining and launching new satellites into orbit can not be guaranteed.
3. Replacing satellites will cause the company to incur significant costs
4. Rapid and significant technological changes to the industry may impair their competitive position
5. If the FCC revokes, modifies or fails to renew or amend their licenses, Globalstar’s ability to operate may be curtailed.
6. Changes in International trade regulations and other foreign trade risks could adversely affect sourcing from overseas suppliers

Assets, Trials, Pipelines:

• The Company has operating and finance leases for facilities and equipment throughout the United States and around the world, including corporate offices, satellite control centers, ground control centers, gateways and certain equipment.
• Prepaid Licenses and Royalties: The Company has signed various licensing and royalty agreements necessary for the manufacture and distribution of its second-generation products. Amounts that are prepaid are recorded primarily in noncurrent assets on the Company's consolidated balance sheet. The Company estimates the portion of expense incurred or royalties earned for the next 12 months and reclassifies these amounts to current assets on the Company's consolidated balance sheet each reporting period. The Company will expense these amounts through depreciation expense over the life of the gateway, maintenance expense over the term of the services, or cost of goods sold on a per unit basis as these units are manufactured, sold, or activated.

Investment Strategy:

Entry: Below .47
Exit: 1.00
Stop loss: .32

Resistance Levels and Support:

Resistance: 0.4970

Support 1: 0.4410
Support 2: 0.3801
Support 3: .295

Analysts Price Targets:

I’ve seen estimates from $1-$2.50 per share.

Institutional Ownership:

Approximately 22% of shares owned by institutions
Insider Trades:
65 % of shares are owned by company executives
Short Volume/Short Interest/Naked Short Volume/Short Shares Available:
1,665,377,204 shares of our common stock were outstanding, held by 221 holders of record
Important Dates:
Conference call July 15th