A look at the future...
My guess on timing as it applies to revenue/price per share is that we'll arrive at profitability even before strat revenues kick in. By the end of 2005, a decent PE ratio plus speculative value of pending strat revenues has GTE trading in the range of high single-digit dollars to maybe 11 or 12 bucks. Final 2005 price depends on extent to which company's efforts result in investor awareness of the size of those pending revenues.
For timing during 2006/2007, note that Stratellite's various pending revenue streams are independent, not sequential events:
* Sales of strats to Air Force, Army, NASA, and Weather Bureau (now National Oceanic and Atmospheric Administration NOAA)
* Sales to other nations
* Leasing entire strats to users who require the entire payload and/or want to do their own command and control
* Leasing partial payload (space, weight, power) to those who simply want a ride for their hardware
* And the big one: income from GTE operating its own services (cell phone, broadband internet, etc.) from 65,000 feet.
Any two or three of those revenue streams could kick in during the same week or month and all of the streams should have kicked in within two years. So, once strat revenues begin, profitability is likely to increase sharply as still other strat revenue streams begin to flow. This is important for two reasons:
1. During 2006, just based on having a PE ratio at all, price per share would go to low teens or better depending on how many dollars are flowing.
2. With two or three of the revenue streams flowing, the speculative value of the remaining streams goes up sharply as onlookers realize "Hey, this thing really does work! We really are on a verge of a worldwide paradigm shift." This realization takes GTE to or beyond $20 per share.
The extent to which this realization happens in 2006 versus 2007 doesn't matter much in the long run because mainstream investors don't buy even highly likely speculations and will want to see two years of increasing profitability before getting involved. This means 2008 and it's your guess as to whether these conservative investors climb aboard closer to $20 or $40 per share. After that, price becomes a function of earnings.
One more prediction: as pleased as they will be with price per share in 2008, those who invested during 2005 will be even moreimpressed with what happens when all those revenue streams (literally rivers of money!) are translated into dividend checks.
Just me and my crystal ball,
Caradoc
