QUIGLEY SHARES DROP SHARPLY * FINANCIAL WEEKLY BARRON'S PUBLISHES NEGATIVE ARTICLE ABOUT DEALINGS OF DOYLESTOWN MAKER OF COLD-EEZE TABLETS.
Allentown Morning Call
01/14/1997
Shares in Doylestown's Quigley Corp., maker of zinc gluconate lozenges that are supposed to lessen the duration and severity of colds, were down sharply yesterday as the market responded to a report in the current Barron's, the financial weekly. The stock, which trades on the NASD bulletin board under the symbol QUIG, closed yesterday at $26.12-1/2, down $4.87-1/2 from Friday.
The Barron's article said founder Guy Quigley has been associated with several questionable figures, including a disbarred stockbroker who recommended a public relations firm -- which was eventually hired by Quigley -- and a disbarred securities lawyer who headed that firm.
The report also quoted experts who questioned the methodology of studies showing zinc gluconate lozenges to be effective and said the Securities and Exchange Commission's Miami office has asked market makers for records of Quigley stock activity.
Yesterday's drop in price was a quick turnaround for Quigley stock, which soared to an all-time high last week when news hit the market that ABC's "20/ 20" program would be doing a favorable segment on Quigley's "Cold-Eeze" lozenges on Friday.
Because Quigley is a relatively small and new company, said financial analyst Joseph Garner of Emerald Asset Management in Lancaster, its stock is especially vulnerable to reports calling its integrity into question.
"It's going to have an impact on the company whether it's true or not," he said.
At the beginning of the year, the company said it had $11 million in back orders. But it lost $694,269 in fiscal 1996 on $1.05 million in sales. The company says its preliminary results for the first quarter of fiscal 1997, which ended Dec. 31, show $1.8 million in earnings on $3.9 million in sales.
Garner said the "20/20" report "helped to offset" the damaging Barron's story.
"They haven't given back last week's gain," he said.
Garner said Emerald on Friday downgraded its rating of the stock from to long-term neutral from long-term buy, but that was because its price had gotten too high, outstripping a year-end forecast of $26 a share.
Quigley has been selling "Cold-Eeze" lozenges by mail order since late 1994 and on the QVC shop-at-home channel since 1995. The company's big break came when a study of its zinc lozenges appeared in the July "Annals of Internal Medicine."
The medical journal said that in 1994, workers at the Cleveland Clinic Foundation who took the lozenges were done with their cold symptoms in 4.4 days. Workers who took the placebo weren't over their illness for 7.8 days.
The company's founder, an Irish citizen who told Barron's he worked in Northern Rhodesia in the 1970s helping cattle ranchers market their product, could not be reached for comment yesterday. A machine came on at the company's offices saying all lines were busy and that the voice mailbox was full and could not take any more messages.
(Copyright 1997) |
