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No. of Recommendations: 10
6) Have the potential to appreciate ten times in five years.
As of 5/11/01:
Price per share: $12.95
Current P/S: 39.31
Current Mkt. Cap.(Mil): $282.06
Share Out. (Mil): 21.78

The CAGR of the market cap for 10x/5y:
Using the CAGR calculator--
http://www.cpadvantage.com/resources/tools/other/cagr-calc.asp
$282.06mil x 10 = $2,820.6mil
CAGR=58.49%
The CAGR for revenues to grow to meet the criteria of 10x/5y:

a.) Future required revenues equal the future market cap divided by the future P/S.
Mkt. Cap. 5y/Future P/S=future revenues in 5y
$2,820.6mil/39.95=$70.60mil
Future P/S: 39.95
Future P/S from the average P/S of two competitors listed at Business.com:
http://www.business.com/directory/pharmaceuticals/biotechnology/geron/competitors/
and the current P/S from marketguide.com:
http://www.marketguide.com
OSI PHARMA.--[NASDAQ:OSIP] Market Cap: $1,514.80mil P/S: 49.55
CELERA GENOMICS--[NYSE:CRA] Market Cap: $2,398.18mil P/S: 30.35

b.) Future revenues divided by the current revenue equals the required increase in revenues.
http://www.marketguide.com
http://quote.fool.com/snapshot/financials.asp?symbols=GERN
(*Current Revenues for 4Qtrs: Total Revenue $6.6mil)
Future Revenues/Current Revenues=required increase in revenues
$70.60mil/$6.6mil*=10.70

c.) The CAGR for revenue using the calculator.
http://www.cpadvantage.com/resources/tools/other/cagr-calc.asp
$6.6mil current revenue.
$70.60mil required revenue in 5 years.
60.64% annual growth rate in revenues required.
http://biz.yahoo.com/z/a/a/gern.html
No future estimated revenue growth for Geron is listed.
http://quote.fool.com/snapshot/financials.asp?symbols=gern
Fool.com has a five year growth rate in revenues of 3.78%.
http://www.business.com/directory/pharmaceuticals/biotechnology/geron/financials/ratios_and_stats/
Business.com also has an estimated five year growth rate in revenues of 3.78%.

d.) Is there a future market to support Geron's required 10x/5y growth of 60.64% in
revenues each year for the next five years?

The answer to the question is no, if the estimated growth rate of 3.78% in revenues for the
next five years is correct and if the market will support a P/S of almost 40 in five years, then
there is no way Geron can grow revenues at 60.64% each year for the next 5 years.
This analysis indicates that Geron cannot meet the rule breaker stock criteria that the stock
must have the potential to appreciate ten times in five years.

7) The stock must have been called overvalued by a significant constituent of the financial
media.


We are unable to find anyone calling Geron Corp. currently overvalued, but there are articles
calling Biotech overvalued dating back to March 2000. There is one source dated August
14, 2000 calling Geron overvalued and calling its purchase as equivalent to buying a
pyramid!

The following three articles are examples:
http://www.bizjournals.com/sanjose/stories/2000/03/27/story5.html
http://www.thestreet.com/stocks/biotech/903888.html
http://network54.com/Forum/message?forumid=47164&messageid=966277978

If we accept the premise of these articles that Biotech stocks and Geron were overvalued last year, it is still really stretching the criteria to rely on such dated articles,therefore we have to declare they do not meet the overvalued criteria.

8) The stock must have a relative strength of 90 or better

GERON CORP---[NASDAQ:GERN]:
http://quote.fool.com/Snapshot/snapshot.asp?symbols=GERN&currticker=GERN
Geron's chart--
http://quote.fool.com/chart/chart.asp?symbols=GERN
"The stock must have a relative strength of 90 or better."
http://chart.yahoo.com/d?s=gern
Geron does have excellent past share appreciation with a twelve month increase of
126.3% (See above chart) from November 10, 1999 to November 10, 2000. Share price has gone up from $10.13 to $22.63.
http://moneycentral.msn.com/investor/research/wizards/SRWHistory.asp?Symbol=gern
According to moneycentral.msn.com---Saturday May 19th 2001---Geron's current
relative strength is 29.
Geron is not a potential rule breaker candidate as measured by this criteria,. Its stock price has been beaten down in the last five months apparently due to the recent market drop and lack of current profits.


SUMMARY

Geron is an exciting prospect but it is at this stage still a prospective RuleBreaker. It does not meet many of the criteria although has the potential to definitely do so.
It is our view that Geron should be watched closely as well as complimentary work being done on Adult Stem Cells by others.
At the end of the day when we consider RuleBreakers we are looking for Companies that can change the World. Geron is certainly at the forefront of a Science that possesses that possibility but only time will tell us if Geron will become one of those Companies.
If they are successful at getting drugs in trials over the next year and no new discoveries come out of left field to knock them off balance we believe we will return to Geron and discover little by little they begin to meet the RB criteria.
The joy of this work is watching our predictions play out.


Prepared by the Wheels Research Corner
http://boards.fool.com/Message.asp?id=1380753000094000
(Who are always interested to receive constructive criticism, comments and new members)



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