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Non-Tech : Enamelon (ENML) - Does anyone follow this?
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To: Harry Ehrlich who wrote (689)8/3/1998 5:07:00 PM
From: Q.  Read Replies (2) of 863
 
earnings out. $10 M loss. Most importantly, working capital down to $23 M.

They are really burning the cash with their marketing. Looks like it will continue, too ... earnings release says they will do another coupon drop.

Maybe I'm misreading this, but it looks like Fox has the spending pedal to the metal. Just looking at the cash situation, this thing is moving really fast.

And only a few weeks ago I was pointing out to Barb that the stock was trading close to cash. This just goes to show you how fast they are burning the cash. This isn't a little smoldering fire. Enamelon's treasury is a gasoline can with a match held to it.

Shareholders equity is a raging bonfire too, down to $27 M from $41 M only 6 mos. earlier.

Cash, though, is the big story in my mind...

No doubt about it, Fox is going to have to seek a lot of funding later this year. With a market cap of only $50 M, I don't see how he can raise enough money fast enough. Typically using convertibles, a co. can raise at most 20% of market cap per year, and for ENML that would be $10 M per year, whereas they are burning that much in just a single quarter right now. If he has a tremendous marketing success to drive the stock price up four-fold he can raise enough to keep afloat, otherwise this thing is going to be all burned up in 1999.

What a thrill to watch ....
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