Loral Space & Communications Message Board

To: Reagan DuBose who wrote (1026)	9/19/1997 12:51:00 PM
From: Eduardo Fisher	of 10851

Reagan, My calculations show that each dollar increase in Globalstar stock price should contribute 20 cents to Loral's share price. Here's why: GLP (the limited partnership) has 52.3 million partnership shares. Of these, GSTRF holds 15.3 million (29.3%), and LOR holds 20.4 million (39%). GSTRF has 30.6 million shares outstanding. LOR has 200.5 million shares outstanding. In other words, for every share of GSTRF, you get 0.5 shares of GLP, and for every share of LOR you get 0.1 shares of GLP. Thus, the market is valuing one share of a GLP partnership interest at 1/2 the price of a share of GSTRF stock. If GSTRF trades for $50, a GLP share should be worth $25. IF GLP is worth $25/share, then the GLP component of LOR should be valued at $2.50. Your estimate was in the ballpark on this metric. However, by the same rationale, since there is of fifth the amount of GLP in a share of LOR as there is in a share of GSTRF, a $1 move in the price of GSTRF should result in a 20 cent move in the price of LOR (assuming the market is rational). Eduardo (All data taken from LOR and GSTRF's most recent 10Q filings.)