KOOP, November 11, 2000.

Let's get serious. You don't need to actually read any of the stories from day one. The chart and the headlines are sufficient.

Everything started day one with the IPO. At that time IPO was the street's acronym du jour. The company and its underwriters demonstrated excellent timing strategy to take advantage of the IPO hype and hysteria. KOOP stock opened at around twelve dollars /shr. It peaked at around $45/ shr in less than a month and showed a bearish MACD from that point till the present. Still, the share price was above the IPO opening price for the majority of the first nine months. Any shareholder could have bailed during that time period without a loss. But like the frog in the pot analogy, turn up the heat quickly and the frog will jump out quickly. As the heat is turned up slowly, he doesn't jump out and is cooked.

At the time KOOP went public, the IPO market had cooled somewhat from the inane IPO scenario which had prevailed at around the end of 1998. But conditions were still quite favorable for IPO wonder speculation. And with the tiny float of 13 million KOOP shares, speculators had little problem transforming the stock price into a virtual yo-yo. Extravagant claims were rotated through many internet related sectors. First it was anything tech. Then anything online. Then anything dot com. Then anything online broker. Then anything online travel. Then anything online health. Etc, ad nauseum. John Q. Investor took to reading future sector valuations in an attempt to make sense of it all. Sector valuations of billions and tens of billions were frequent. Dates in the 2003 and 2008 range were also frequent. While John Q was scratching his head and wondering who was paying $350/shr for thousand share lots of the big four or five, or gamling on the latest risky IPO, savvy traders were winking and entering orders with a short two letter acronym, "SL."

It was absolutely unavoidable to have to stake a claim at a time when advertising was costly. KOOP had to spend money extravagantly to keep in the public eye after the IPO. Then the Barron's article. Then the layoffs. Then WebMD laid off and the patient(Drkoop.com) was given a cash infusion, 27 million shares at 35 cents a share. How fickle people are. But as soon as conditions permitted, the contracts were renegotiated and the hemorrhaging was stopped. Ship captains don't like typhoons. But when you are in one, you are in one.

Envy is blind. Envy is not reason. Envy is just desire. When people see others making, "easy money," they want to do it as well. Imagine buy and holders who paid $60 for T or the twits who bought into $600-$750/ share for QCOM. Percentagewise they aren't as bad off as some others. Probably the half trading day just after Thanksgiving day, 1998 was the day with the highest number of carefully orchestrated squeezes in market history. What a crash the following Monday. Anybody remember NAVR? OMKT? AWEB? CNKT? Any of the dozen or so others? Buy and hold, yeah right. One tenth or one fifteenth the value for as long as one's breath can be held. Some folks are still holding. After that there was a whole bunch of class actions which promised a knight in shining armor would swoop down from the heavens on a winged horse and give theses suckered investors back the money they had lost. That sort of warm fuzzy ending may happen in Hollywood fairytales. But look here jelly bean, in real life sharks chew up their prey and swallow it and deposit it out the other end. If you didn't know that, well, we're sorry to have to bust your bubble. But that's the way it works.

That is not to say that a yarn can't be spun. There are honorable men who can spin a tale for spell bound listeners. Honorable men in courtrooms may be able to divorce a select few from reality and hold them spellbound just long enough to set a precedent. Inveterate nitpickers and molehill builder-uppers have been selected from eleven top notch law firms. That's more than the number of firms involved after the nefarious skulduggery involving over a dozen securities, which happened the day after Thanksgiving 1998. The main difference is they are concentrating their firepower on one tiny little upstart company with a puny little 13 million shares and an excellent business plan. Does this seem reasonable? It doesn't have to sound reasonable, it's a lawyer thing. That's why when investors heard about eleven law firms going after Dr Koop, some knew it was time to bail.

It wouldn't be necessarily a bad thing. Just think, you'd thereafter be able to buy stock and if it went down, just invoke the established legal precedent. Say that the business plan of the company whose stock you impetuously purchased was flawed. Better yet, say it was intentionally flawed. That would make it a tort peccadillo for sure. Investors might be able to wriggle out of their responsibility for due diligence. SL orders would become obsolete. We might see a whole new era in investing. A "New Paradigm." How about that. Buy some stock and it tanks. No prob. You can claim the business plan was intentionally flawed. Boom, you get your money back. Plus if it goes up you sell and make a profit. You short a thousand shares of a stock and it triples. No prob. Just invoke the reverse legal precedent. The business plan was too good and they kept it a secret from you.

Boy oh boy, by gosh, by golly, you gotta hope the plaintiffs win.

When KOOP still had value above the limit for short selling, $5, the news beagn to mount up. More and more and more firms joined in on the free for all. The firms representing jilted investors publicized the class action suits and guess what? The stock value went down below the $5 limit. Probably the jilted investors didn't realize that they would cause a great devaluation of the stock. If they had looked ahead, they may have realized that the stock would dive and that only investors with short positions would benefit from that. But after the stock goes below $5 the shares can't be shorted. They should have kept the eleven, count them eleven class action law suits a secret instead of broadcasting the news all over the place. See what happened? Now the stock is at $1. Nasdaq delists stocks which stay below about $1. What if that happened? Being delisted from the Nasdaq often precedes bankruptcy. The disgruntled investors might well have caused the company to go bankrupt. How would the jilted investors get their money then? Are the law firms working pro bono? Hmm. You'll just have to think this one through. It's all so very, gosh darn confusing.

What is the bottom line? You might say that the news on KOOP stinks and you'd be 100% correct. Could the bottom line be that the news on KOOP is a classic example of the opposite of, "too good to be true." The news on KOOP has been too terrible to be true. That might be the penultimate bottom line.

But the bottom line is: "It's the CONTENT STUPID."

Dr Koop is a medical scientist with vision. He has the inside track on medical content and his vision for its presentation differs markedly from the quasi-tabloid nature of the competition. People have not yet realized this. In time they will. drkoop.com will be recognized as a leading source of trusted and authoritative medical information.

It really doesn't sound like drkoop.com intends to go bankrupt, does it? Mr. Rosenblatt didn't leave his former position to manage drkoop.com's bankruptcy.

Position C. Everett Koop, M.D., 83 Chairman, John Zaccaro, 65 Vice Chairman, Richard Rosenblatt CEO, Director, Edward Cespedes Pres, Stephen Plutsky CFO

Top institutional holders of KOOP: http://biz.yahoo.com/hd/k/koop.html

Book Value (mrq) $0.70 Market Capitalization $27.3M Shares Outstanding 34.9M Float 14.7M, Sales (ttm) $15.3M, Volume (3-month avg) 1.34M Daily Volume (10-day avg) 266.0K

Source: Yahoo! company profile page on KOOP: http://biz.yahoo.com/p/k/koop.html

Yahoo! research page on KOOP: http://biz.yahoo.com/z/a/k/koop.html
Earnings growth est. for the next five years: 48.4 %/year av., Average of four analysts' recommendations: 2nd week Nov., 2.50, Number of brokers recommending as: Strong Buy 1 Moderate Buy 0 Hold 3, EPS for Jun 2000, -$1.18/shr., Surprise -0.85 %

Good omen. The word on the street has changed quite a bit in its tone and tenor.

"They need inspiration. If you were to grab a couple of these numbskulls, at, say, Drkoop.com (KOOP) or EToys (ETYS) by the collar and shake the crap out of them, it might send a message. A message that says: 'I love you, but let's stay focused. We've got a business to build.'"
David Bunnell from UPSIDE.

"drkoop.com Prepares to Reclaim Leadership Position in Consumer e-Health With World-Class Management Team." Oct. 31, http://biz.yahoo.com/prnews/001031/tx_drkoop_.html

Nov 03,2000, Wall Street Journal, http://public.wsj.com/sn/y/SB973199797678451015.html"Drkoop.com Acquires Web Site drDrew.com" "for 1.58 million shares of drkoop.com stock plus $150,000 in cash." $150k cash? You can't beat the price with a stick. Does it seem like companies are being aquired for reasonable prices these days? The company said it will continue to seek out "undervalued properties" for potential acquisitions and that the deal, "creates additional licensing revenue"

Oct 26, Reuters, drkoop.com Inc. and Medical Advisory Systems Inc. have formed a partnership which "could boost struggling drkoop.com's revenues.""New services would include doctor chats, medical travel insurance and clinical trial referrals for Medical Advisory's network of pharmaceutical and biotechnology customers"

1) What are the law suits about?
Answer: At best the suits are about disgruntled investors wanting to get back money of which they had been temporarily deprived. At worst the filings themselves may represent unethical behavior. If they are substantiated get ready for a whole new paradigm in stock investing. Risk free.

The legal argument is essentially for better or worse, DITW, dead in the water.

2) How does one make a 10-fold return on the outcome of the possible or likely dismissal of the law suits?
In the simplest of terms one buys for $1 and sells for $10.

Is everyone out there convinced of the good doctors guilt, bidding down his stock in the interim? Answer: No. The stock price has come way down providing an unexpectedly good buy opportunity. Paradoxically, this whole mess could conceivably have been facilitated by the good doctor's impeccable virtue and lack of culpability. Profits were made on the rise of KOOP stock's price and on it's fall. The doctor's goodness and the soundness of the business endeavor itself would insure that profits will be enjoyed yet again on the way back up.

Is a "limit order" the key to major growth in value due to leverage and risk of some kind, which you have have not yet explained?
Answer: No, if you enter an limit order to buy, for example CSCO at $40, you pay a maximum of $40/ shr of CSCO purchased per that order.

The recent story doesn't say a word about the law suits but addresses Dr. Koop's projects on medical ethics via Internet. This sounds (at first guess) like measures taken to protect his Internet investments, which might be adversely affected by the law suits you mention, though (like you) I am inclined to trust the good doctor, mindful that one can fall into the pitfalls of the Internet without being on the far side of actionable deceit.

You are incorrect about your first point. Dr Koop epitomizes high ethical standards in word and deed. Dr. Koop has always done so even in the face of more severe adversity. The timing is merely coincidental. You are correct about your last point. Dr. Koop bears no culpability whatsoever for any malfeasance. He doesn't have time for such pettiness.