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Interesting reading, but it doesn't really address my question...
WiMax question:
According to that article, "WiFi-style access will be limited to a 4-to-6 mile radius (perhaps 25 square miles or 65 square km of coverage, which is similar in range to a cell-phone zone). Through the stronger line-of-sight antennas, the WiMAX transmitting station would send data to WiMAX-enabled computers or routers set up within the transmitter's 30-mile radius (3,600 square miles or 9,300 square km of coverage)."
The 4-6 mile radius doesn't even cover the distance from the ground to the Strat, even from directly underneath. And the 30-mile radius requires directional antennas on the receiving end, something usually not associated with mobile access. But even using the larger, directional-antenna-requiring radius, how do we reconcile this with Huff's assertion that "the two way signal, like cellular, voice, internet service will have a 400 mile diameter or 125,000 square miles"?
Assuming Huff knows and accepts the limitations of WiMax, he must be referring to something else. But what? What sort of medium would enable two-way cellular, voice and/or internet service over 200 miles, with or without a directional antenna requirement?
jacques0, I agree - no apology (or re-reading) necessary. I think the thread was more idle discussion than anything, at least for me. If I really thought that the Sanswire engineers were coming to this board for solutions to their challenges, I would not be invested in the stock.
jacques0, you wrote:
"I'm a little baffled by all this talk of a sail. The strat, according to what I've seen so far, is going to have rear vertical and horizontal stabilizers. These are, essentially, sails.
Think of a weathervane. The stabilizers would, I assume, keep the strat oriented nose-into-the-wind so that the props would only be needed to maintain position over a point on the ground.
Close your eyes and picture a big rooster on top of a barn."
While I think we all agree that an additional sail is not necessary to make the current design work, I believe the problem of maintaining station is a little more complex than motoring into the wind. The Strat is being designed as an aerodynamic lifting body, and will not be attached to an anchored pivot point as a ground-based weather vane would be. The planned six GPS positioning systems are surely intended to maintain position in three dimensions, so the engines will also probably need to pivot and work in conjunction with the lift and drag of the airship while minimizing the power requirements. And all this needs to be done in the low-density, occasionally volatile environment of the stratosphere.
While your rooster analogy is valid to an extent, I think it is a gross simplification of the actual navigation problem they are tackling, which should not be underestimated. Kudos to the team for hopefully coming up with a working solution to this multi-variable equation.
Re Aviation Today article
Here is information on the Korean HAA project mentioned:
http://www.kari.re.kr/jsp/english/EResInfo/EResFld/EAvi/EAvi_02.htm
http://www.kari.re.kr/jsp/english/EResInfo/EKeyBusi/EAviFld/EAviFld.htm
Note: Please do not expect easy navigation on that web site - I had to mess with the url's just to get the pages to load (most of the links contain redundant location information and backward slashes instead of forward). But these two pages seem to contain the most relevant information.
Rocky: As previously asked in the Lockheed Martin thread yesterday, how about a section in the header to contain such links on the competition? Do you agree that it would add to the already excellent wealth of relevant information contained there? If not, why not? TIA... and thanks again for all that you do for the board... while I'm at it, a belated thanks to all who reported on the unveiling - it was very much appreciated...
Re sailing a Strat, while it is probably impossible to use the wind to maintain position (tacking is not possible without resistance), the Strat itself would be equivalent to a "sideways" sail (a foil, to be more accurate). Would it be possible to use the wind to our advantage in other ways? I wrote about this previously:
http://investorshub.com/boards/read_msg.asp?message_id=5817398
Just food for thought...
AeroEngr84, I appreciate your input. Do you work at Wallops Island yourself? Or maybe you prefer not to say, which is fine. The botom line is, as someone with experience in stratospheric payloads, I'm interested in what you have to say.
Based on your comments, I think we are in agreement that the previous design ("Vern's ship") was likely fatally flawed. It appears that you also agree with their recent decisions to move from Dacron to Tedlar, and from aluminum to composites. Were you aware that the ex-NASA engineers only came on board last month, shortly before those design changes were made? I think this is consistent with the theory that perhaps, as you suggest, they HAD no clue about the demands of stratospheric flight BEFORE the arrival of this new batch of engineers. But given that those changes are now being made, coincidentally with the hiring of these guys, and at the expense of missing their schedule, can you concede that they might NOW have a clue?
It seems to me that the new guys are more than window dressing - they may be saving the project from potential disaster. Better late than never... do you agree?
ineedtoknow, you wrote:
"The LM project was put on the backburner. They negotiating with the Government to scrap there HAP project."
Do you have a link or source? LM posted the following on their web site about six months ago, and it is still there:
http://www.lockheedmartin.com/wms/findPage.do?dsp=fec&ci=14477&rsbci=0&fti=0&ti=0&am...
TIA for any additional information. (Note that Lockheed is not the only other organization working on this concept.)
Note to Rocky: How about adding a section in the header to cover the competition? I think this would be a valuable addition to anyone's DD. Thanks for considering...
Shab, you wrote:
"My expectation, based upon past guidance, is that we should actually show profit in our second quarter financials, but with the extra high powered talent we are attracting and changes to Sanswire ship itself, could we possibly be being too optimistic about Q2 financials - maybe we need to adjust our expectations now?"
I think you raise a very good point. As I wrote previously, GTEL seems to have created a fallback position in their March 15 letter to shareholders. Note the specific wording used:
"Our margins in the carrier business have grown substantially in the first quarter and this is what drives our prediction to reach profitability by the end of the second quarter. This will be the goal for the GlobeTel business unit excluding the Sanswire business unit. For a telecommunications company to be profitable while it is still in the development stage speaks highly of the team assembled here at GlobeTel. With the GlobeTel team and the Sanswire team that continues to attract world-class professionals, we feel that we are on the right track and the sky is the limit."
How do you interpret this? My interpretation is that they are guiding toward profitability in Q2 ONLY for the telecom portion of their business, and that GTEL as a whole (including the wholly-owned subsidiary Sanswire, with all its expenses) will likely NOT show a profit for quite some time.
If others do not share this interpretation, I would be interested to hear your reasoning. But as far as I'm concerned, investors should NOT be expecting positive EPS for GTEL as a company in Q2. Anyone with this expectation will likely be very disappointed.
It's not the PPS or the delays - it's the credibility (or lack thereof) which is disturbing. Based on corporate press releases, I am left with the impression that we have recently taken a huge step backward in terms of the timeline, in exchange for an equally huge step forward in terms of design and risk aversion. My question is, if all these advances happened in the last three weeks, what the heck have they been doing over the last couple of years, and how much of that work is now applicable? If the bulk of the work on such a project consists of feasibility studies, technology evaluation and design, then much of this work now needs to be redone on the radically redesigned airships currently proposed. While they are not exactly starting from square one (I'm sure some portion of their work will still be applicable), it is still a significant hit to the timeline, and I think they should have at least included some of this information in the 4/5 press release, rather than waiting for shareholders and the media to arrive a week later.
Yes, delays are to be expected. But if you think a few months won't make any difference, think again. Sanswire is not the only company to be working on this concept; for example, Lockheed expects to have their prototype in the air by mid-2006:
http://www.globalsecurity.org/intell/systems/haa.htm
Lockheed has many advantages over Sanswire, and they appear to have their act together. This excerpt in particular caught my eye:
"Lockheed Martin’s unique experience with certificating the GZ-22 airship with the FAA allows it to understand and address the concerns of flight through controlled airspace, especially with an unmanned airship. Safety of flight issues, operation of an unmanned vehicle, and operation over populated areas are all concerns that we have addressed during the design evolution."
Sanswire has two advantages that I see:
1) First mover advantage. Even with this latest major hit to the timeline, they still would appear to be several months ahead of Lockheed and others, and delays are not unique to Sanswire - others will almost certainly encounter them also. But we are not so far ahead that further delays would be inconsequential, as some have opined. And based on recent press releases, I doubt that a big behemoth like Lockheed would encounter such radical redesigns at such a relatively late point in the development cycle.
2) Sanswire is much smaller, and therefore more nimble, than a giant like Lockheed. Less internal politics, quicker effective changes in course, etc. Assuming they now have the proper team in place, Sanswire has the potential to move very quickly in this new direction, as compared to Lockheed which is subject to decision-making channels and internal red tape.
But don't become deluded into thinking that Sanswire has a lock on this tremendous opportunity. The billions that Mr. Huff spoke of is alluring to other companies as well, and as of now, no one has a sellable product to claim this jackpot. Yes, we want to end up with the best product possible, but please rethink your position before posting such things as "the timing doesn't matter, we will get there eventually". Eventually ain't gonna be good enough to claim this prize.
jburk, you wrote:
"What continues to happen is people not accepting personal responsibility for choices made. Too many want to blame others for their own failures. Everyone needs to accept the fact that they invested the money into GTEL. No one forced them to do it. They can blame PR's, Blame the CEO, blame the weather but the fact remains, they made the investment. You will never see me complain about something that I did. I accept total responsibility for what I do."
Let me ask you something. If you went to a Chevy dealer and bought a new car at sticker price based on the dealer's recommendation, how would you react if it arrived from the factory missing the doors, tires and engine? Would you just accept it as is, assume they did the best they could, and chalk it up to your own failure for investing your money in such a venture? After all, no one forced you to do it... sure, perhaps the dealer led you to BELIEVE that your car would actually be drivable, but you shouldn't blame him, since the bottom line is that you should always accept total responsibility for what you do, right?
Sure, delays beyond the control of management are part of the risks of investing. And if the company doesn't make specific promises, an investor should not make specific assumptions. But when a company puts out a press release making promises four short weeks before the "delivery" date, and then FAIAP reiterates those promises ONE short week before that date, I think an investor should be able to have a reasonable expectation that those promises will be kept, or at least that they were made in good faith in the first place. Can anyone with a halfway objective outlook claim that their April 5 press release was forthright, honest and realistic? Should we not expect such qualities from our management?
Anyone who thinks that corporate executives bear no responsibility to their shareholders for their actions or ommisions should review recent prominent court cases. No, I'm not suggesting litigation here, as I don't think they crossed the line into criminal behavior, and in any case a lawsuit would make no sense for such an early-stage company. But please don't tell me that it's all my fault for not accepting personal responsibility for my choices.
I'm not blaming GTEL management for the delays; but I AM blaming them for producing misleading press releases and not correcting them in a timely way, even when it becomes obvious that relevant factors had changed dramatically long before those changes were disclosed. The point is, while every investor is responsible for the investments he makes, he in turn has a right to expect integrity from the management of those companies in which he invests. And frankly, at 11:30 PM EDT on the day an explanatory press release was again promised, I'm still waiting for a shred of that integrity to make an appearance.
I hope Mr. Huff is listening.
Rocky, with regard to the March 15 letter to shareholders, it seems that you are trying to draw a bold distinction between a "lie" (i.e., intentionally misleading) and an "overly optimistic statement" (i.e., unintentionally misleading). To be honest, I am not sure which is worse. At least the intentionally misleading CEO has a plan which may or may not be in the shareholders' best interests; in the case of the unintentionally misleading CEO, he gives the appearance of not having a clue about what's going on in his own company.
I am not surprised by additional delays in the Stratellite program, and as a shareholder I would not have had a problem with them if I felt like management had been forthright, honest and REALISTIC with their previous guidance. But to read the March 15 letter again in the light of yesterday's events leaves me feeling like management was (or is) either dishonest, incompetent, and/or completely binded by unbridled optimism.
And let's face it, this is not the only instance. As recently as last Tuesday, they issued the following statement (bold emphasis mine):
Press Release Source: GlobeTel Communications Corp.
GlobeTel Confirms the Unveiling of Sanswire One
Tuesday April 5, 9:47 am ET
MIAMI--(BUSINESS WIRE)--April 5, 2005--GlobeTel Communications Corp. (OTCBB:GTEL - News) today announced that its wholly-owned subsidiary, Sanswire Networks, LLC (Sanswire), will be unveiling its prototype high altitude airship, Sanswire One, in California on April 12, 2005 as previously announced.
....
According to Timothy M. Huff, CEO of GTEL, "Sanswire One has undergone a significant construction program since February 22, when we held our Technology Summit in San Bernardino. Sanswire One marks the beginning of an exciting phase in the development of the Company's high altitude platform program. At the unveiling, we will answer questions concerning the airship construction and performance. We will also give an updated timeline to the future events of Sanswire One."
Soon after the unveiling, Sanswire One will be moved to Edwards Air Force Base where the actual launch will take place. Mr. Huff stated, "Our plans are to launch at Edwards AFB, under the direction of NASA and the Air Force. Each agency will have to approve the flight plan before the launch date. By launching it from Edwards, we will be using non-FAA regulated air space which should expedite the flight safety approval process. Until the launch date, we will be doing ground base test and begin the process on the construction of Sanswire 2, the 400-foot long commercial airship. Sanswire 2 will be constructed in our new facilities near Edwards AFB."
A public announcement will be made on April 13 to give an update for those who couldn't attend the unveiling which will include pictures of Sanswire One.
-----
Obviously, they knew last Tuesday that the original plans for the unveiling as stated on March 15 were going to be drastically changed. Why did they reiterate that the unveiling would take place "as previously announced", with no mention of the likely state of the airship at that time as compared to what was promised three weeks earlier? Why did they choose the wording "soon after the unveiling" for the move to Edwards, given that previous expectations set in their March 15 letter were for late April? Were these lies, in the strictest sense of the word? Perhaps not, but they were certainly grossly misleading.
And regarding the issue of getting the ship to Edwards prior to launch, note how management minimized the issue as if it were trivial. I brought this into focus at the time in the following post:
http://investorshub.com/boards/read_msg.asp?message_id=5779596
The sentiment at the time (which still remains, I think) was to avoid conjecture, and wait for management to clarify the issues. The sad thing is, management clarification has proven to be less reliable than the conjecture that preceded it.
I'm not saying the risk/reward here is no longer attractive, but I will say that in my opinion, management credibility has taken a major step backward. Mr. Huff, if you are listening, please refrain from any more overly optimistic projections and confine yourself to the realities of this grand project upon which your company has embarked. We are with you, but you need to meet us halfway. All we ask is that you level with us, give us realistic timelines (or none at all), disclose pertinent information on a timely basis, and stop treating us like bastard children.
Regarding Skype, they have already partnered with iBasis, one of the largest wholesale VOIP carriers in the world:
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=IBAS&script=460&layout=-6&item_id...
IMO, iBasis is another undiscovered, grossly undervalued OTC stock. You can find out more at the following links:
http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=IBAS&script=2100
http://finance.groups.yahoo.com/group/ibasisgroup/?yguid=39849102
http://messages.yahoo.com/?action=q&board=ITXC
(The last one is the old message board of ITXC, which was taken over by iBasis posters when the company was swallowed up by Teleglobe - almost an anagram of GlobeTel. Coincidence or more?)
Did anyone notice that the share price went up a few ticks on elevated volume as soon as Rocky came back? But alas, it now appears to be selling on the news...
And another thought about pictures:
I agree that they might have good reasons to guard against releasing proprietary information (i.e., if the skin is not completely on and the inside of the strat is still visible, which might necessitate "blurring" of part of the picture). But more importantly, I think they realize that the "first pictures" are going to be historic and siezed upon by the press. Understandably, they probably want to ensure that those first pics are both perfect and well-timed. Why would they want to start the party now, when they are so close to launch, before they have a confirmed launch date? Perhaps if they were interested in insider daytrading, that is exactly what they would do - perhaps even releasing doctored photos. The fact that they are NOT doing so is, IMO, a good sign.
BTW, I acknowledge that at one time they did promise pictures a month before the launch (personally, I don't think they should have set that expectation, but that's water under the bridge). The important thing is that I believe their plan is to release the pictures when it is most appropriate, perhaps to coincide with an important news release. That is exactly what I would do if I were in charge.
(Additional note about whether or not personal cameras would be allowed at the public viewing - that, too, would seem to be a good sign. Perhaps the military interest has something to do with that decision.)
One more thought about the jet stream:
I agree with others who wrote that it should not be a problem for Sanswire 1 and eventually the Stratellite, for all the reasons already cited. However, I would take it a step further and suggest that it could eventually be a POSITIVE factor, in that it could be leveraged for positioning purposes.
We have seen that getting permission to maneuver through controlled airspace can be a problem, at least in this early stage. And if they are having these sorts of problems in the U.S., even when NASA and the military are involved in the project, then one could imagine similar, perhaps more severe potential problems in other geographic areas (South America and Asia come to mind).
Now what if they were able to launch from one or more central points, where the controlled airspace issue has been resolved, and then "sail" the Strat to the desired destination using tailwinds to expedite the journey? Of course, they could probably cruise above the jetstream at 13 miles up, but their speed would probably be severely limited (a journey of 10,000 miles, at an average of 5 miles per hour, would take about three months, or 17% of the hypothetical tour of duty for the Strat). This is probably why their current plans call for shipping, assembling and launching the Strats locally, near the purchasers' desired destination.
But we know that the design of the Stratellite (as opposed to Sanswire 1) is aerodynamic and presumably maneuverable. What if they were able to figure out a way to safely sail the top of the jet stream to dramatically increase speed and reduce travel time? Suddenly, the bulk of regional politics and controlled air space regulations would drop out of the equation. This might not be feasible for some applications where service interruptions must be minimized (the time to replace malfunctioning equipment would be considerably longer than 2-3 hours), but it might work fine for other applications like weather monitoring, surveillance, and any application with redundant and/or overlapping functionality.
Just thinking out loud...
Rocky, please add my thanks to those of so many others who have been here far longer than me. Even though I am a relatively new poster here, I am a veteran of many other boards over the last several years, and believe me, this was and is one of the best.
Regarding the idea of starting a private board on Raging Bull, I can provide some first-hand insights. I have been a member of the private board "The Profit Express" for many years:
http://ragingbull.lycos.com/mboard/viewclub.cgi?board=CLB00640
While the goals may be different on that board (we discuss a wide variety of stocks from both technical and fundamental viewpoints), it has proven to be a very nice alternative to public boards. Everyone is respectful of others, shares their research in an open and honest way, and there is virtually no spam, pumping or bashing. All members must submit a request to join the forum (on that particular board, we require a sponsorship from an existing member to vouch for the candidate), and the moderator's sole job (beyond initial setup) is to approve or disapprove membership, so it would be far easier to manage than this iHub board.
I'm not sure how much latitude is given to the "About the forum" section, which I guess would be equivalent to the header information and links on the iHub board (we don't use it on the TPE board, but you might be able to use it to approximate your most excellent iHub header information). Barring that, I'm sure you would at least be able to provide a reference to the current iHub board, which I would hope would continue to provide those great links.
One more heads-up: I have heard that adding members can sometimes be problematic. Raging Bull is not known for the stability of its servers or software, so there might be a minor headache there occasionally, but I'm sure it would pale in comparison to the headaches you have been dealing with here.
Anyway, I would encourage you to check it out. If you would like to first become a member of The Profit Express to see how a private board works, I would be delighted to sponsor you - just let me know. Either way, I wish you all the best in your future endeavors, and thanks again for all that you did here - it is appreciated.
techBear, first let me state from the beginning that when it comes to stocks, I have learned to rely on accurate data and logical reasoning, as opposed to hopeful optimism and blind faith. This is not to imply that either describes the average GTEL investor, only that I require more than faith to achieve a comfort level in any stock. Obviously, I have seen enough in GTEL up to this point to allow me to invest a substantial sum in its shares. But IMO, "worry" (I prefer the term "concern") is part of the investment game, so I don't expect to stop being concerned any time soon.
You ask "shouldn't the fact that the ship is built be more then enough for you"? No, it is not enough - the ship must also fly or it is worthless. And if the timing did not matter, why would GTEL management have decided to move it at all, when they could have waited a few months for FAA approval to launch from their own facilities? Who cares, you ask? Obviously, GTEL management cares. And if they care, why shouldn't I? Why shouldn't you?
I hope you are right, and that moving it to another place is just a minor detail. But lacking that hopeful optimism and blind faith, I remain concerned. Remember, this is not just a test of the equipment, it is also a test of the political and regulatory systems which must be navigated (not just here in California, but anywhere a Stratellite is expected to be sold and assembled in the future). And even if those hurdles are successfully navigated in record time, I would hate for something as trivial as an unmarked power line or an unexpected wind shear to cause a financial disaster; any long delays would eliminate the tremendous first-mover advantage that GTEL currently enjoys.
For the record, I AM very impressed with the technology and engineering which has apparently gone into Sanswire 1. But IMHO, the fact that the road to 55,000 feet must travel along an as-yet unapproved, 100+ mile long, human-piloted, low-altitude California corridor is sufficient cause for concern.
enson, good point - I hope you're right, and that the strings on the way to Edwards AFB are easier to pull than the ones above the SansWire facilities were.
My biggest concern at the moment:
I apologize in advance to those who might consider this nit-picking or guessing, but the following paragraph from the most recent letter to shareholders has me concerned:
"The original plan called for the launch to happen at our facilities, but issues with the FAA and the concerns of such a large, unmanned airship going up in controlled airspace would delay our launch for several months. Therefore, we have been in talks with the Air Force and NASA and now plan to launch the airship from Edwards Air Force Base north of Los Angeles. We still have one issue, which is how to get the airship from our production facility to Edwards AFB through controlled airspace. We have consulted officials and believe the best way is to place a temporary gondola that would house a single pilot to fly the airship to Edwards. Once at Edwards, the gondola would be removed and the airship would be launched unmanned from Edwards in military controlled airspace."
It appears that the issue of transporting the airship to Edwards was still unresolved as of the writing of the letter. We don't know who the consulted officials were, nor do we know if the FAA will approve their plan for a pilot to fly the ship through controlled airspace. The scary thing to me is that elsewhere in the letter, they stated this:
"Since this is a very new aircraft section for the FAA, we feel it might take months to finally get clearance to launch an unmanned airship in commercial airspace."
The assumption they appear to be making, based on their discussions with unknown officials, is that it will be far easier to obtain permission for flying an untested prototype of an unmanned LAV with a jury-rigged gondola and a live human on board over a hundred miles through controlled airspace than it would be to get permission to launch the same vehicle WITHOUT the jury-rigged gondola and live human roughly 13 miles straight up. This may actually be the case, IF the presence of a pilot allows them to avoid some specific red tape involved with unmanned aircraft which does not exist for piloted aircraft, and IF there is not equivalent red tape involved in getting permission to fly a piloted untested prototype vehicle through controlled airspace. But this is certainly not a given at this point, based on what I have read.
On the positive side, we know that piloted lighter-than-air vehicles like the Goodyear and Fuji blimps are permitted to fly through controlled airspace all the time, although I'm not sure how much lead time they are required to give to file their flight plans with the FAA. But on the negative side, we are talking about an untested prototype here, designed to cruise without a pilot at high altitudes in low-density wind conditions far from any obstructions. If I were the FAA official with the responsibility to sign the permission slip that will allow this vessel to float along Highway 5 for any length of time, putting at least one life and unestimable property at risk, I might want to drag my feet a bit, at least to do some due dilligence and go through channels (i.e., cover my butt) before I sign.
In other words, I would not be surprised to see another delay, perhaps a lengthy one, before we get to Edwards and glory. But we already knew that, right? Once again, just trying to keep expectations in check.
Disclosure: Long 279,000 shares (i.e., not a basher)
Rocky - thanks for the info. What was your source? Any indication why the 60%+ difference in price from one day to the next?
Since the open market low on July 15 was $.031, I think the option exercise scenario is very likely:
http://tinyurl.com/3r8sp
If so, then the $.02/share investment for 6 million shares was nothing to sneeze at, as it was substantially greater than the amount received from the sale of the 1 million shares while the new shares would have been locked up for 12 months. That would have been a bullish event 20 months ago. Bravo, Mr. Huff! Rocky, TIA for your source info...
Rocky, I referred to the email as "alleged" only because I didn't receive it personally, I only saw it on this message board. As far as I'm concerned, all information found on a message board which cannot be independently corroborated is "alleged". I did not mean it in a disparaging way.
And no, the letter is not bothering me. As far as I'm concerned, Huff answered the question truthfully in a very clever way, and the fact that his 6 million share purchase was most likely the result of an option exercise is both understandable and acceptable to me as a shareholder, so I have no need or desire to ask Mr. Huff to clarify this particular 20-month-old issue at this point.
What DOES bother me is the way others interpret ambiguous messages from management in a uniformly positive way, which may lead to unrealistic expectations. In other words, we share the same concern: guessing won't solve anything. But the first step to avoid guessing is to realize that the ambiguity exists in the first place.
Ambiguous corporate communications are confusing at best, and can be downright misleading at worst. I'm only trying to balance the discussion with regard to such issues. Of course, it would be preferable for management to be as clear as possible in their communications to avoid ambiguity in the first place. But short of that, I think the next best thing is to look at the issues from all sides, separate the facts from the conjecture, clarify ambiguity when warranted, and base expectations accordingly. Agreed?
Watney99, in fact an option WOULD fall under the heading of something that GTEL owed him, and options ARE generally considered another format for bonuses. This is exactly why I am questioning the (purposely?) ambiguous wording of the alleged email. Here is the precise wording again:
"I purchased the shares with my own money. It was not for compensations for salary or bonuses or anything that GTEL owed me. I wrote a check, sent money from my personnel account, gave up dollars that I held in a US Bank, I hope you get the point, it was MY MONEY."
He writes that the SHARES were not for compensation for salary or bonuses or anything owed by GTEL, and this would technically be correct even if the shares were purchased as an option exercise. Due to the wording, some might erroneously conclude that he purchased the shares on the open market, but he does not SAY this, nor would it make sense, given that he sold a million shares the same week he acquired the 6 million in question. If he really wanted people to know that he had ourchased the shares on the open market, he could have said so. But the wording he chose is consistent with an option exercise, and this would make perfect sense in terms of the timing of the sale of 1 million shares at market value (probably to pay for the exercise of the 6 million, give or take). I did exactly the same thing when I exercised options in my former company, which is where I got the seed money for my other investments like GTEL.
My concern is not that he may have exercised options, but that his wording here and elsewhere tends to be ambiguous. It doesn't mean he is malicious, but it is a red flag in terms of the veracity of press releases, FWIW.
Shab, I understand your point of view, but I must disagree that such issues as Q2 profitability and the veracity of press releases in general are in the realm of "knit-picking".
Question: Based on the information you have right now, do you think GTEL will report positive EPS for Q2? Or even taking prediction out of the question, do you think GTEL is even GUIDING toward positive EPS in Q2 (as opposed to only the GlobeTel business unit)? It's a simple and straightforward question, but based on recent press releases, I suspect there is confusion among shareholders on this issue. Why should this be?
While on the topic of shareholder communications, does it bother anyone else that Huff was discussing the share price and volume at the conclusion of the most recent letter to shareholders? I know we are all here to make money, but doesn't it seem a little unprofessional for the CEO of an early-stage company to be emphasizing the stock performance at this point? In my experience, the issue of stock performance is usually addressed by upper management with something like "we are focused on executing our business plan, and shareholder value will follow". I just hope that a higher near-term share price is not at the heart of their business plan.
And regarding profitability in Q2, note the wording in the shareholder letter:
"Our margins in the carrier business have grown substantially in the first quarter and this is what drives our prediction to reach profitability by the end of the second quarter. This will be the goal for the GlobeTel business unit excluding the Sanswire business unit. For a telecommunications company to be profitable while it is still in the development stage speaks highly of the team assembled here at GlobeTel."
To me, this implies that they are predicting profitability only for the telecom business, NOT for GTEL as a whole. Unless the Sanswire unit brings in significant revenue from a deal struck between now and 6/30/05 (two quarters before they expect to have a commercial version completed), it is likely that the expenses inherent with the Sanswire business unit (including the salaries of all those new high-caliber hires) will keep the GTEL EPS in the red well beyond Q2. The fact that they appear to be creating something of a fallback position here has me a little concerned.
One more thing about the shareholder letter. Now they are telling us this:
"We announced our plans for the prototype in the fourth quarter of last year with a launch date in late January. This date was pushed off to accommodate design changes and provide for better materials to be used for the launch. It also was pushed to give us corporately, more time to find out the needs of the markets we intend on servicing. The date for launch was then pushed to a window of the last week in March."
But in January, they were telling us this:
"The Partners and Technology Summit, previously scheduled for January 20 and 21, 2005, has been moved to February 20 and 21, 2005. Further, as a result of the increased interest and rescheduling of the technology summit, the launch date of the Stratellite prototype has also been rescheduled for March 25, 2005. This move enables the company to accommodate scheduling issues with attendees and to ensure that all issues are fully addressed prior to launch."
Now, while the earlier explanation may not have been technically wrong, it certainly didn't mention anything about design changes and better materials. I remember that when I first read that release in January, I thought that they were probably skirting the issue that they wanted more time to finish building the thing right (I think I even posted that concern at that time). Why not just tell us that? As others have said, it would be perfectly natural, even expected, to have some delays when working on this sort of project which has never been done before. Why do they feel the need to sugar-coat their press releases?
Please don't take this the wrong way - I'm not bashing, I'm buying - but I don't have my head in the clouds either (at least not yet), and I do have some concerns which I would like to discuss in an open forum. Hopefully such concerns are not discounted in favor of blind faith.
FWIW, everything Huff allegedly wrote in his email, including the following...
"I purchased the shares with my own money. It was not for compensations for salary or bonuses or anything that GTEL owed me. I wrote a check, sent money from my personnel account, gave up dollars that I held in a US Bank, I hope you get the point, it was MY MONEY."
... is perfectly consistent with an option exercise. I know, as I have been there myself. It is a commitment, to be sure, but the AMOUNT of money committed is often orders of magnitude below market value. Note that while he stated it was "not for compensations for salary or bonuses or anything that GTEL owed me", he did not clearly state that it was not an option exercise, nor did he confirm that he purchased on the open market at market prices. The shares acquired through an option exercise technically do not fall under the definition of compensation (the shares themselves are not given to the recipient, he pays for them), although an option would have been granted earlier allowing him to buy at a specified price, and the OPTION would have been part of his compensation.
It's not a big deal either way, which was really my point in the first place. But I will say this - if the additional 6 million shares were, indeed, the result of an option exercise (which, IMO, is the only reasonable explanation why someone would acquire 6 million shares and sell 1 million in the same week), then Huff would appear to be very careful and clever with the words he uses in his communications to shareholders. And that, IMHO, is not a trivial issue.
Just to make sure we're all on the same page:
Back in July 2003, Huff stated: "In the past week, I acquired 6 million shares and sold 1 million shares, for a net increase of 5 million shares."
"Acquired" does not equate to "bought on the open market". It seems pretty obvious that he "acquired" the 6 million shares as some sort of option exercise, probably at substantially below market value, and sold the 1 million shares at something closer to market prices, perhaps to cover the exercise transaction. Note that the share price was much lower at the time the Form 4 was filed, so the total funds received was minimal when compared to today's prices. Note also that there is nothing wrong with what he did, and any one of us in a similar position would likely do the same. Just please don't confuse these transactions with the bullish scenarios one might conjure if one assumed that Huff had purchased those 6 million shares on the open market. While his increased stake might have been somewhat bullish back when the share price was below three cents, these events of July 2003 have little bearing on today's outlook.
Just trying to keep us grounded...
Slyhunter, this link might address your concerns in a general way:
http://www.sanswire.com/faq.htm
Rocky, you wrote:
Last years volume for entire year......approx...1.6Billion
First 59 days of 2005 volume is approx...1.18Billion..
Yes, and if you were to calculate the actual value of the trades (volume times average price), the ratio would be even more amazing.
From MSN:
"Water vapor amounts in the stratosphere are much lower, typically on the order of 4 to 6 parts per million by volume (0.004 to 0.006 %). Yet even this water vapor plays a significant role in the energy budget of the atmosphere. Water vapor is radiatively active, absorbing and reradiating the thermal (or infrared) energy from the surface. It also plays a key role in the formation of particles in the stratosphere, such as aerosols and at very low temperatures, special types of clouds known as polar stratospheric clouds."
IMO, not much would be needed to produce enough hydrogen to slowly and steadily replace lost lifting gas over an 18-month extended flight. Whether "not much" is enough would seem to be an open question.
Barring hydrogen generation, and given the alternate source for batteries already confirmed by Sanswire, what other reason might Proton have had for attending the summit? Could fuel cells provide a possible alternative or addition to batteries for stored solar-generated electricity down the road?
Thoughts about Proton (summit attendee)
They have an interesting product line which includes fuel cells and hydrogen generators:
http://www.protonenergy.com/index.php/html/companyinfo/products/index.html
My first thought was that the Stratellite might take advantage of Proton's UNIGEN fuel cell systems, which "have the potential to capture, store and release electrical energy more cost effectively and efficiently than batteries or other alternatives."
But then I got to thinking about hydrogen generators, and how such a system just might be a potential solution to the "lost gas" problem.
"Proton's HOGEN hydrogen generators make high purity, process pressure hydrogen from water and electricity for diverse uses in semiconductors, metallurgy, electrical generator cooling, meteorology and fuel cell applications."
While the main ingredient in the "proprietary lifting gas" to be used in the Stratellite will surely be helium, perhaps they have found a way to suplement the mix with hydrogen during extended 18-month flights. Think about it - the necessary ingredients are water and electricity. We know they will have a good supply of electricity in the form of photovoltaic (solar) energy, and there may be enough water even in the stratosphere which could be condensed and used as the raw material to produce relatively small amounts of hydrogen (can anyone confirm this? I know there are no clouds 13 miles up, but I would think there is still a modest amount of moisture even at that altitude...)
Just thinking out loud about the lost-gas issue and possible solution. Comments and/or criticisms would be welcome.
willsimon, what time period are you using in your MFI calculation to get a reading below 20? Although I am a long-term investor in GTEL, I am primarily a swing trader, and I use 13 days as my MFI variable. Using that period, I calculate the MFI to be up around 66 at the moment. Are you talking about intraday MFI readings (i.e., day trading)? Please elaborate.
TIA...
Rocky, thx for the great board! Re verifying Vern's identity, is there a good explanation why he posted a cell phone number which he claimed was his, when the owner of that number has no idea who he is? (I called that number, and the poor thing said she had received all kinds of calls back when that number was posted, but has no idea who Vernon Koenig is...)
His last post on the GTEL board was as follows:
"Danielle: You are full of $#'t....my phone hasn't rung since I posted the number. It is on and connected to the battery charger at this very moment.
Danielleinsf almost translates to something like "Danielle in San Francisco." Are you trying to tell people something? Come out of the closet and speak up, Dude!
Vern"
Now, I'm sure rocket scientists are as temperamental as the rest of us, but does that sound like a logical response from a legitimate insider who obviously posted the wrong number (whether accidentally or on purpose)? I'm not saying he isn't who he claimed to be, and I don't doubt your two secret sources, but I'm curious if you yourself have heard a reasonable explanation why he posted a bogus number and, rather than apologize and/or explain, chose to attack the person who called him on it (someone whom I know you trust, as he has posted about meetings with GTEL insiders). Frankly, the fact that Huff apparently acknowledges that those posts were from him troubles me even more.
Any additional information would be appreciated. TIA...
Since some of us are coming clean with our worries and concerns, I might as well lay one of mine on the table...
Does it bother anyone else that they originally planned a late January launch:
"FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Nov. 23, 2004--GlobeTel Communications Corp. (OTCBB:GTEL - News) today announced that Sanswire Networks, LLC, its wholly owned subsidiary, is on track to launch the prototype of the Stratellite being built in California towards the end of January 2005."
Then they postponed both the summit and the launch, allegedly because of all the interest:
"MIAMI--(BUSINESS WIRE)--Jan. 5, 2005--GlobeTel Communications Corp. (OTCBB:GTEL - News) today announced updates and events schedules for the first quarter of 2005 for its wholly owned subsidiary, Sanswire Networks, LLC (Sanswire)...
Timothy Huff, CEO GlobeTel Communications Corp, stated, "The interest in Sanswire's Stratellite technology is growing by the day. Given the amount of interest on an international scale, we had to expand our schedule to include various groups' timing issues and give everyone the opportunity to preview our revolutionary technology."
Mr. Huff continued, "We have had on-going discussions with several groups within the U.S. government and military concerning the rollout and use of the Stratellite. Further, we are in discussions with the other corporate and private groups, as well as foreign governments, who all have expressed interest in the development and commercial viability of the Stratellite."
The Partners and Technology Summit, previously scheduled for January 20 and 21, 2005, has been moved to February 20 and 21, 2005. Further, as a result of the increased interest and rescheduling of the technology summit, the launch date of the Stratellite prototype has also been rescheduled for March 25, 2005. This move enables the company to accommodate scheduling issues with attendees and to ensure that all issues are fully addressed prior to launch."
But according to today's guidance, the assembly is still taking place through February and the beginning of March:
"February 16th - The propulsion team will arrive from the United Kingdom to install the engines and the guidance systems for Sanswire One.
February 21st - The rigid airframe will be complete and ready for FAA inspection. The airframe must be inspected before the final covering is placed on the airship.
February 28th - The final section of batteries will arrive from Germany. Shipments of the batteries will start arriving February 16th. Once all the batteries have arrived the final installation will be completed and tested.
March 1st - The final inspection of internal systems followed by the installation of the airship outer covering. FAA approval to be obtained before the final cover is applied to Sanswire One.
March 4th - The solar photovoltaic, which generate the majority of the power used on Sanswire One will be delivered by U.S. vendor and installed the following week.
March 15th - Testing of lifting gas cells will commence and final systems checks and structural inspections by all the section teams.
March 16th - Payload installation will be complete, including the first of three different packages that will be tested over the next 30 days."
Now, maybe I'm being overly critical, but in hindsight, was a late January launch ever a realistic possibility as of November 23, 2004 as they stated? Was the reason for the two-month delay really just to accomodate the increased interest, or was it to give them more needed time to complete the components and put the thing together? (Hopefully nothing more sinister than that, but you can never be 100% sure...)
And then there is the South American partner issue, as I brought up in January:
http://ragingbull.lycos.com/mboard/boards.cgi?board=CLB00640&read=59628
I'm still adding, as I still like the risk/reward ratio, but I am very aware of the risk component in that ratio. Anyone who becomes too complacent might do well to take a look at what happened to PLFM.PK:
http://finance.yahoo.com/q?s=PLFM.PK
I agree with Dan - some pictures would sure be nice, as they promised in November:
"Plans are in place to provide a video link from the airship to GTEL's website for shareholders to watch the launch and flight of the Stratellite. Thirty days (30) prior to launch, pictures of the Stratellite being constructed can be found on the company's website at http://www.globetel.net , an announcement will notify the public of the availability of the pictures."
By my calculations, those pictures should be available around February 23-25, which is the end of next week. I sure hope they remember that promise - it would go a long way to easing any investor fears...
Re stops, be careful with rules of thumb - the reality is usually somewhat more complicated. Setting automatic stops may be a prudent thing to do for high-volume, mid-to-high cap stocks trading on a major exchange. They are NOT a very good idea for an OB story stock, as they make easy targets for greedy specialists.
IMO, you would be much better off setting mental stops (i.e., just get yourself out if your threshold price is exceeded). The catch is, you must be both disciplined and vigilant for this strategy to work, but IMO it is far better than to give your profit potential away to unscrupulous specialists in the wild, wild world of penny stocks.
There may always be sunlight at 65k feet, but it's not from OUR sun. 13 miles up is nothing compared to the diameter of the Earth, which is 7890 miles. That's like the width of the head of a pin on a basketball. You'd get a slightly longer day up there, but there would definitely be night. If you park a Stratellite above any populated area (i.e., other than near the poles), it will need those batteries every night (which is OK, and probably one of the main reasons for required servicing every 18 months or so).
Reason for pullback - good question. The old adage, "sell on the news", might be the reason. IMO, the news was all good - sounds like everything is on schedule, and guidance included no apparent negatives - but perhaps some new traders expected the SP to skyrocket when this type of PR hit the street, and when the fireworks didn't happen, they took their scalps and waited on the sidelines, waiting to buy at the bottom of the dip (which I believe we just saw).
I agree with others who have written that consolidation was way overdue. I added on this dip, and will continue to do so as long as guidance doesn't change.
On the surface, this South America news seemed almost too good to be true, which always makes me nervous. So I did a little digging starting with net searches (Google and Yahoo) on those two companies, "Dynamic International Networks" and "Beacon Supply Comunicaciones". Disturbingly, the DIN search returned NOTHING - for a company that was supposedly founded in 1997, they have been ominously absent from any sort of news over the last eight years.
The search on BSC returned very little also, but did uncover one news release regarding a previous deal with Sanswire done in June 2003:
http://www.eetimes.com/story/83928
Comparing the two releases, it looks like Sanswire was originally slated to provide two Stratellites directly to Beacon, without the DIN middleman, in "Phase 3" of the project. In the mean time, I haven't heard of any progress on phases 1 and 2 - I wonder if they ever happened? Now if the funding is to come from DIN and its partners, that's great. But no news from DIN in eight years? And the only searchable published deals involving Beacon were with Sanswire, two deals separated by 19 months of nothing? A skeptical investor in an OB stock might see a large red flag here...
I'm not saying it's time to get out, or even that the PR's are bogus, just advising a bit of caution. Remember, there is no SEC oversight here. In the mean time, I'm truly enjoying this breakout, not even taking profits yet, despite the cautious statements I just made. Even wish I had traded some of my IBAS for GTEL a few days ago... (I planned to do that AFTER the IBAS earnings report on 2/2/05, hoping GTEL would wait until then, but looks like I missed a great trading opportunity.) I expect the froth surrounding GTEL is just beginning, and I'm looking forward to a very interesting (and volatile) first quarter...