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Biotech / Medical : GUMM - Eliminate the Common Cold -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (1784)	12/5/1999 5:02:00 PM
From: DanZ	Read Replies (1) \| Respond to of 5582

Mad2, My only agenda is to have an honest discussion about Gum Tech or any other stock. I am very intolerant of liars, scam artists, and those who hype their positions. If I was engaged in a pump and dump as some of you have alleged, wouldn't I have sold a few weeks ago instead of buying? And why am I buying more GUMM now? Somehow I fail to see your logic. You posted "Fundamentals stink on GUMM". My reply ala Mad2: Fundamentals are terrific for GUMM. Does that tell you anything? Your one liner comes across as hype. I can only assume that you are still talking about the price/sales ratio, book value, blah blah based on last year's data. I disagree with this method of valuing a firm because it completely disregards the future, and future expectations move stock prices. If Gum Tech's revenue in Q4 are close to my $9.1 million estimate, their total sales in 1999 will be $17.25 million. At a stock price of 14, the price to sales ratio would be about 6. This is down considerably from just a few months ago when you said GUMM was overvalued based on the P/S ratio. As I mentioned then, the stock price can go up at the same time the price to sales ratio is going down. Isn't this what is happening? You were wrong and I was right. Do you have a hard time admitting this? The price to sales will continue to decline in the future as GUMM trades higher because sales are growing faster than the stock price. It isn't unusual for companies to issue options to employees, underwriters of stock offerings, and lenders. While these options will eventually be exercised, they should already be discounted because they have been outstanding for some time. Companies report their earnings based on the current outstanding float and the fully diluted float for this precise reason. Name almost any blue chip company in the US and I'll find where they issued options and warrants at some point in their history just like Gum Tech. The number of shares outstanding will increase over time and I have accounted for this in my proforma income statements. Their revenues are growing so fast that the additional number of outstanding shares is mitigated to a great extent. Regarding the chart, this stock is very volatile and turns on a dime. The technical picture looked very good just a few days ago. Where were you and your charts then? Funny how you didn't post them when they didn't fit your agenda. The stock trades in this manner because it has a small float and large short position. I am a big proponent of technical analysis, but I tend to use it less for investments and more for short term trades. The intermediate and long term charts are still bullish while the short term chart is under pressure. The short term chart will eventually turn up...might even happen next week for all anyone knows. The stock is down primarily because of a short term loss of confidence due to the withdrawal of the AJIC article and the uncertainties related to Quigley's lawsuit. At some point, investor confidence will return and the fundamentals that are still intact will exert themselves. There are no long term ramifications to AJIC withdrawing the first study because the second study will be out soon. Quigley's lawsuit is completely bogus and they haven't even followed through with some of the threats that they made in their press release. Their lawsuit is an act of desperation to save their business from complete failure. Even in the unlikely event that Quigley prevails, the most that they would be entitled to is royalties on sales of Zicam. Royalties typically range between 5 percent to 10 percent of sales and this wouldn't have a material effect on Gum Tech even in the unlikely event that Quigley prevails. Short sellers like to exaggerate events that could be construed as negative, and that's all that you, InfoStream, and Wexler have done this weekend. The facts remain: The nicotine gum joint venture is coming soon. Gum Tech's sales should be up more than 500% this quarter from the third quarter. Their margins will be higher. They will earn a profit, and possibly completely reverse the 22 cent loss posted in the first three quarters of the year. Their debt will be down. Cash, A/R, and cash flow will be higher. The number of shares will be a little higher. When taken in the context of the overall picture, I say big deal. You're entitled to your opinion that the stock will be single digits by spring. My prediction is that the stock will be near 30 by spring. May the man who has done more research and knows more about Gum Tech be closer--and that would be me, not you.