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Non-Tech : GUMM - Gumm Tech International Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (107)	4/20/1998 11:05:00 AM
From: Q.	Respond to of 148

to answer my own question <I wonder if it is possible to borrow shares now.> the answer this morning was no.

To: Q. who wrote (107)	4/21/1998 12:29:00 AM
From: Mike M	Read Replies (1) \| Respond to of 148

John- What you said about Kern leaves very little room for argument...He was (and I am sure still is) an arrogant bastard with larceny in his heart...To the company's credit they got rid of the SOB... I do take issue, however, with your valuation of the company. If you read the write-off there was no cash burn, simply bad accounting correction. Hence cash position was literally unchanged....(I think you will find accounting more to your satisfaction in the future and you will probably recognize the name of accounting firm!) As someone who has followed the company closely and spoken with now president Gary Kehoe, let me give you another perspective. Kehoe is no Kern, in fact, he is a real class act who headed up the neutraceutical division of Nabisco in his final job with that company which he spent 19 years before joining GUMM. He was almost totally responsible for development of clients and heads up the research/product development. He always wanted folks to recognize this company first as a research company and only later as a manufacturer of gum delivery system for numerous OTC drugs...This company, as you know, was missold by Kern and consequently hyped with promises which, while not impossible, had way too optimistic a time table. GUMM is doing the research for a number of different companies interested in selling products which get to the blood stream faster and more effectively than via a pill...They claim to have saved some of these companies up to two years of research and of course, though they are paid for the research, the real payday will be product out the door. Because the company has no financial muscle of its own, they will, for some time - but not forever-, be forced to live by the rules of private label manufacturers, which will allow them to disclose little about their progress. The advantage of private label, however, is the potential to work with the big boys and can create big demand in a hurry. So where are they? Hard to give you an exact picture on that since the company is clearly living up to client privilege....I can say to you that I would not short this company at these levels. Product development has been ongoing for over a year with such companies as Nabisco (certainly the largest but by no way the only company). A number of different products are in the final stages and, assuming a "go-ahead" may well be in production by next quarter....(that is just a guess-but an educated one)...Additional manufacturing equipment is being installed in their very large and modern plant. In April of 99, the nicorette patent (Smithkline) will run out...You can bet your bottom dollar, GUMM will have a competitive product out with one or more large companies...on day one! It is their research and FDA approved facility which makes them so valuable to other companies and why the 2d largest maker of gum in the world is working with them. Point is, this company has some hurdles yet, but is a far greater prospect than a lot of people are giving them credit...I don't have any proprietary indicators but I do believe that this stock is under serious accumulation. I also know, beyond a shadow of a doubt, they are under "adult" management and there are some interesting developments rumored but not yet confirmed in that regard. I found Gary Kehoe to be accessible and a real gentleman, complete opposite of Kern...In fact I believe the board's dismissal of Kern was, among other things, a desire to insure that their most valuable commodity didn't take a walk in view of "intolerable circumstances". The company has preannounced a loss for last quarter (around $1.3M) but may well show a profit in the current quarter assuming enough sales and shipment of aspergum (Schering Plough) and to Herbalife... In view of these things, I disagree with your projection of the company. If you still want to short GUMM, however, you might have your broker check with Edward Jones. I have several thousands of shares on margin and last I checked some 9,000 had not been margined. I wish you well. Mike