Boston, MA 10/07/2014 (wallstreetpr) – Globalstar, Inc. (NYSEMKT:GSAT) (Closed: 2.26, Down: 24.92%) crashed by a huge margin twice in the last 4 sessions. The rumor was floating from the last week, which was confirmed yesterday by the release of a report by Sahm Adrangi, the owner of the small hedge fund Kerrisdale Capital managing about $300 million and the report claims that the business of Globalstar, Inc. (NYSEMKT:GSAT) should be valued at zero instead of billions of dollars. According to Adrangi, the company valuation stands on aggressive and clever marketing-promotion instead of reality and its TLPS Wi-Fi service concept has nearly zero chance of being commercially viable. The net debt of $500 million may sink the company if the report turns out to be true.
The major problem for Globalstar, Inc. (NYSEMKT:GSAT) in the exchange would be the huge possible supply as it is widely owned by many hedge funds, most famous among them would be Soros Fund Management. Naturally some of these funds, if not all, would take a quick step to exit the stock as soon as possible and the price action in the last few sessions suggests that some of them may already be selling.
Globalstar, Inc. (NYSEMKT:GSAT) started trading in 2006 around $17 but soon crashed to $0.15 by 2008. Another retesting of the same area in 2012 formed a solid bottom, which had pushed the stock to a straight 15-monyh rally from $0.26 to $4.53. The last few sessions now have brought the stock about 50% lower than the 52-week high now.
Technically, a break below the support area of $2.10-$1.90 would be a fatal damage to the structure as the next major support comes near $1.00, a lot lower than the big hedge funds would like to see. The confluence of the Golden Ratio retracement level and the historical demand zone around $2.11 makes that the last hope for the bulls. That means today may be the final trend decider day for the stock.
