I too have heard the rumors about new gum products with Watson, Warner Lambert, Rembrandt, and Colgate. I believe these rumors are true but one has to understand that GumTech can't release news until they sign a supply agreement. The first step in GumTech getting new business is to sign a confidentiality agreement with a partner, during which time they formulate the product and deliver samples to their partner. Once the partner decides to go forward and market the product, they sign a supply agreement with GumTech. At that time, GumTech can and will release news to investors. To the best of my knowledge, GumTech is in the first stage of the process with all the aforementioned companies. There are others too, I suspect.
One thing that separates investors from traders in this stock is that investors will wait patiently while GumTech works to establish supply contracts and traders won't wait for news. GumTech does not have a history of announcing news during market hours, and the traders who try to buy and sell this stock based on news will chase it up and down. Those on SI who know me will attest that I am a trader by nature. However, I am committed to holding my position in GUMM as long as the forward fundamentals appear positive. The chart is holding as well, and that appeases the trader instinct in me.
Other market moving news that could be released at any time include the Zicam clinical study in the New England Journal of Medicine or an article in a major publication. GumTech hired a PR firm and they have already interested Business Week magazine, Time magazine, Investors Business Daily, and the Wall Street Journal to write an article on Zicam. There is no way to predict when these articles will be published, but I believe that they will move the stock up when they come out. GumTech is not a well known company and this is why I believe that the stock will move up if an article on Zicam is published in a major publication. The PR firm is also talking to about 100 other media sources about Zicam, including newspapers, radio, and television programs including 20/20, among other well known programs.
I agree with you that the lack of news is causing some selling. This is separating those who want to trade GUMM from those who want to invest in GUMM. However, I don't think people should expect the company to release news as soon as the financing with Citadel is completed. If GumTech has news to release, you can bet they will release it. However, if they don't release news right away, this simply means that the company has not yet finalized supply agreements with Watson, Warner Lambert, Rembrandt, Colgate, and others. One should not assume that deals with these companies are not forthcoming, because I believe that they are.
In the interim, I am hopeful that the NEJM will publish the Zicam clinical or a major publication will run an article on Zicam that will appease the traders. Whether or not the company announces news in the next week or two does not change my opinion on GumTech. The company has tremendous growth potential, both in their gum business and Zicam business, and the stock will eventually make a big move up and reward those investors who remain patient.
Best to all,
Dan
PS to SW: I hope you are feeling better with each passing day. I'm glad that you are posting again and look forward to more of your comments. |
