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Biotech / Medical : GUMM - Eliminate the Common Cold
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To: DanZ who wrote (3843)4/15/2001 4:16:57 PM
From: Mark Marcellus  Read Replies (1) of 5582
 
It means that he and his boss are scared about the implications of the proxy that was released last Friday and can't think of any other bash comments.

I won't pretend to have a clue as to what Truthseeker was driving at, but I can't imagine the proxy released on Friday would have caused him any concerns that weren't already public. It doesn't look to me that there's much new there. For example, the revelation in the pro forma that GUMM's continuing operations would have lost only $8.8 million instead of $11 Million last year is hardly enough to scare anyone who is negative on this company.

As far as I can tell, the one big piece of news in the proxy that wasn't public is that the royalties on the P&G dental products are capped at $1.2 Million and are for a limited time frame. This eliminates one major source of risk from the short perspective. In addition, while royalties on other products aren't capped, the time frame is. One thing which confused me is how many products will be eligible for that second royalty agreement. The prospectus says 3, the fairness opinion says 6. I wonder if that got renegotiated at the last minute.

BTW, I'm guessing that the downdraft in GUMM's price which occurred around the time the sale was announced was caused by transactions undertaken by Wrigley to hedge their stock purchase. People who enjoy gaming these sorts of things will probably be playing the other end of this transaction, which potentially takes place when Wrigley's lockup expires after six months and they are allowed to begin selling shares.
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