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Biotech / Medical : GUMM - Eliminate the Common Cold
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To: Mad2 who wrote (821)8/29/1999 11:35:00 PM
From: DanZ  Read Replies (1) of 5582
 
Mad2,

Most companies have to borrow money to grow because they don't generate enough cash from operations. This is especially true for a young company like GumTech that increased its sales more than 100% from 1998 to 1999. Financing is only dilutive when the cost of capital exceeds the return on investment. Financing is not dilutive simply because a company issues more equity. IBM has 1.8 billion shares outstanding. Do you think they issued that many shares when they first went public?? Geez, duh, NO! Does that mean that IBM used somebody else's money to grow? Duh, Yes! Does this mean that the money that they borrowed throughout their history was dilutive? Duh, No!

Are you trying to tell me that you already know that the $6 million that GumTech borrowed from Citadel is dilutive? How could you possibly know that before you know what their return is on that borrowed capital? Let's face it; you are only speculating, and your posts indicate that you have no idea what you are even speculating on.

Your comment that the stock is overvalued is getting old, particularly since you don't acknowledge anything that has been written on this subject by me or others. READ MY LAST POST! Is every stock that trades at some multiple of sales and book over the Mad2Meter threshold overvalued? Gee, you must be a very rich man because every stock that you sell is overvalued and every stock that you buy is undervalued. We are so lucky to be blessed by somebody with your wisdom.
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