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Strategies & Market Trends : The GUMMMy Bear Squad touting Gum Tech (NASDAQ: GUMM) -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (194)	5/21/2000 10:18:00 AM
From: DanZ	Read Replies (1) \| Respond to of 207

<Insider selling increases the supply of free traded shares which does effect the supply/demand of the stock.> I agree, but in the case of GUMM, this is PAST tense. Your other comments about insider selling ignore the difference between OPTION related selling and DIRECT selling of stock by insiders. <revenue growth with no profit has lost it's popularity> The capital asset pricing model doesn't change over time, nor do other financial methods of valuing corporations. Investor's perceptions of value definitely changes over time, and this is why people who correctly value firms irrespective of short term movements in stock prices will make money over time. Sustained revenue growth is important when proforma income statements indicate that a company will be profitable in the future. Stocks don't discount the past; they discount the future. This will never change, and in the long term, GUMM will increase in value if the company continues to grow revenues. At some point, the company will pass their break even point and realize economies of scale in their gum business. Revenues from nicotine gum and dental gum will make Gum Tech's gum business profitable. If you don't recognize this, then either you don't understand finance or you don't understand Gum Tech's business in great enough detail to make any reasonable or believable comments.

To: Mad2 who wrote (194)	5/21/2000 11:09:00 AM
From: DanZ	Respond to of 207

Sorry, missed a few things... The selling by all the insiders combined represented a negligible percentage of the trading volume in GUMM. I don't think that it had much of an effect directly on the supply and demand. If sales in the first quarter had met expectations that prevailed in January, the stock would most likely be trading higher than where the insiders sold and the bashers would have an even weaker argument. I have never refused to acknowledge that GUMM has risk. In fact, I have specifically written that this stock and every stock have risk. I take issue with your comments primarily because you don't give Gum Tech credit where credit is due and you put a negative spin on each and every point. In your opinion, rises in the stock are never due to positive forward fundamentals. The stock went up in February because it was discounting a good fourth quarter and what investors thought would be a good first quarter. It went down in March because first quarter sales failed to meet those expectations. I'm sure that the Quigley lawsuit and Nasdaq weakness had something to do with the decline as well. The insider selling had little or nothing to do with the decline in the stock. I'm waiting for your earnings forecasts to justify your opinion that the stock is overvalued. I have already posted my projections and believe that the stock is undervalued. Both of us won't be right. The latest institutional ownership report is out. The number of shares owned by institutions was basically unchanged last quarter (down 4,000 shares) and the number of institutions that own GUMM increased from 11 to 19. I believe that one fund in particular accounted for most of the 184,000 shares sold. They have a firm rule that they must sell a stock if it declines 30% from their entry point. insidertrader.com