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Strategies & Market Trends : Z PORTFOLIO -- Ignore unavailable to you. Want to Upgrade?

To: Carl Worth who wrote (11473)	1/30/2004 9:54:58 AM
From: DanZ	Read Replies (5) \| Respond to of 11568

The anosmia issue isn't new to me or anyone that knows anything about Matrixx. Ms. Bentley, one of the Plaintiffs in the case filed last week, posted in a Yahoo! Group over a year ago that she was considering legal action against Matrixx. The stock ran from 10 to 20 with one such case already filed, and her threats known. Those are the only two cases filed to date, representing four plaintiffs. Literally millions of people have used Zicam Cold Remedy, and only four are trying to blame the product for their loss of smell. The shorts are blowing this issue way out of proportion. One thing that they fail to mention is that the common cold itself is the most common cause of anosmia. The shorts also fail to mention that the Plaintiff in the first case filed was taking three prescription drugs at the same time as Zicam, two of which list smell and taste disorders and potential side effects. First, the Plaintiffs in both cases will have a very difficult time proving that Zicam is responsible for their anosmia when so many other factors could have caused it. Second, show me a consumer products company that doesn't have a product liability claim against it. Matrixx has product liability insurance, and the impact to the lawsuit is very likely immaterial. In fact, the company didn't even disclose either lawsuit in a press release or 8 K, which would be required if management believed it was material. They are sending a signal that this is just normal business. In our litigous society that is full of ambulance chasers, cases such as this are bound to be filed. Third, earnings are more important in determining the value of a company than a lawsuit, especially when one considers all of the above factors. The anosmia lawsuit is a risk, but in my opinion it has already been overly discounted in the decline from 20 to 13. This company's stock is worth a lot more than 13 based on fundamentals, and that includes the additional risk of the anosmia issue. Several independent analysts have written reports on MTXX in recent months, and a few institutions took positions in the stock. It is only a matter of time before a bigger research house takes an interest in the company, especially with the stock at 13.