Quote:
Originally posted by Merlin
fyi...
IBES Estimates for the company project a loss of about $4.85 per share in 2003 and of $3.70 in 2004. Estimate trends for 2004 have been showing a positive trend over the last 6 weeks.
Cash flow estimates are -2.51 per share in 2003 and -1.61 in 2004. Not a bad improvement year over year. But given the stock run up of more than doubling since Aug. and the fact that the business model has yet to be validated, I'd say the risk/return characteristics of this stock are not really in your favor at this moment. I'd pass and reconsider when they are closer to being cash flow break even. 
 Sound advise here.
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It would be interesting to do a full analysis on them with DCF, DROE and DAE, but those also rely on heavy assumptions that can be colored by opinion. I doubt that those would show such an extreme price premium for the stock.
I remember doing that stuff on Adelphia pre-scandal when their stock was flying high. Their cash flows sucked, along with everything else for that company. The stock was valued at anywhere from -80 to -30 with those models.
I think the business model is somewhat reasonable, it is surely much better than many of the .bombs. However, whether they can keep satellites up while keeping costs down IS unproven. It is not like GPS that is run by the gubment.
LK