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

To: Mark Marcellus who wrote (4035)	12/5/2001 12:16:43 AM
From: Mike M	Read Replies (1) \| Respond to of 5582

Boy is this game fun... How about F)...You didn't hit the mark on any of them. <<A company with a history of failure, which has never achieved an operating profit, has no proven product...>> "History of failure" is a bit strong. They certainly had some failures... The "Cigarrest" fiasco was a failure. That, of course, was ill fated from the start with a tiny budget and a no holds barred competitor (Smithkline Beacham)... The gum manufacturing never reached expectations but not because of anything GUMM did or failed to do. Their partners never lived up to their end of the bargain. Whether it was the inability or unwillingness to market their products (Breath Assure and Ranir) or take their products to market (SWMAY and P&G),GUMM appears more snake bitten than anything. I think there is great bitterness in the shorts because, despite all of this, their greatest expectation was nipped. Here was a company out on a limb with a $6M loan, covenants up the ying yang and an untested product. Wexler and all his minions were drooling with absolute certainty that the company would be below $1 in six months. Trouble is they didn't fail on Zicam. It wasn't pretty but it was no failure. In November USA Today announces a study that ends up never being published and the orders skyrocket. The debt is paid in full. The bears howl that it is a one year fad and that next year the product will die. The next year Zicam shows significant growth at the cash register and even wins a coveted award. Still marketing is difficult with so little money. What money they are making after advertising is being chewed up by a gum manufacturing business that can't get off the ground. The fact that they sold their gum manufacturing business and changed the complexion of their business is certainly a debatable point as to whether that is good or bad. That Gary Kehoe left to do what he loves best and that Carl Johnson is brought in to manage changes the personality of this company completely. The shareholders say give him a chance. The bears say nothing's changed. Time will tell. In the mean time we have to sit here and rehash the same old crap over and over. I don't know what aggravates the bears most. That Johnson has done next to nothing to "pump" the company must gnaw on them. That GUMM now has a large pile of money has to irritate the hell out of the bears. Sure, we can debate management and execution until the cows come home. What the hell for? Why, for instance, does anybody care what the "mad scientwist" thinks of the testing of the product? If Zicam doesn't grow sales this year then the company probably is overvalued. If they do then the jury is out. But hey, why wait and find out. We can sit around and kick the dickens out of the company day in and day out...After all, who are we accountable to? I'm really tired of this.

To: Mark Marcellus who wrote (4035)	12/5/2001 9:19:21 PM
From: Mad2	Read Replies (1) \| Respond to of 5582

Interesting. the answer that best applies is "E" of course. BTW using the figures you posted, GUMM has 25-16.5 mil or 8.5 mil to spend/burn or use as current capital. Thus using the 65 mil market cap the enterprise value attributed by the market is 65-8.5 or 56.5 mil. Assuming GUMM can predictably generate roughly 5-6 mil in aftertax income assuming no growth (or other capital demands) then they are fairly valued. Is Zicam worth 56.5 mil. Davidson apparently doesn't think so as the enterprise value paid values Zicam business at 16.5/.4 or $41.25 mil Sorry folks GUMM price has a lot of optimism built in. I do suspect that Zicam might be leveraged by a larger consumer products company (distribution, name recognition etc). Alternatly one can hope the greater fool theory comes back into vogue. BR, mad2