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Biotech / Medical : GUMM - Eliminate the Common Cold
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To: Mike M who wrote (3926)8/11/2001 7:56:00 PM
From: Mark Marcellus   of 5582
 
I don't remember reading that they planned to buy in the 8's. I doubt management will in fact buy back much of the stock

So management is either planning a buyback if the stock price goes down, or more likely they're blowing smoke about the whole buyback thing? Maybe I'm missing something, but I fail to comprehend how you're able to see a possible short squeeze based on those assumptions. I guess you're "thinking outside of the box" again.

The interesting thing is that they have an awful lot of cash right now. Much more than they have ever had...and they aren't very capital intensive. It remains to be seen what they really use their cash for

One thing they haven't used it for is advertising support for Zicam Allergy Relief. Have they already thrown in the towel on that one? If not, why are they not supporting the brand now that they're awash in cash?

I actually agree with you that now is not a good time to be short. If you're going to take a cynical view of this company, the most likely scenario is that they throw lots of advertising money at Zicam Cold Remedy this fall, and try to do a Quigley style product blitz during cold season to be followed by a Quigley style stock runup. It would be wise to wait and short when, and if, that happens.

Think about that one Mark. Wouldn't be much point to selling the stock to Wrigley in the first place

If I am to take at face value the company's implied claim that their stock is undervalued, what was the point of selling that stock to Wrigley? And once they've done it, what's the point of a buyback? Either one or the other of those actions was stupid, or there was some sort of hidden (manipulative, most likely) agenda.
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