About a year ago Life Savers, Inc. plunged into the billion-dollar bubble gum market with a sweet, pink concoction called Bubble Yum. It soon ballooned into the country's biggest bubble gum, selling more than 300 million packs in 15 months at 20 cents apiece. Then a couple of months ago Yum's bubble was punctured by two scary rumors: that Bubble Yum contained spider eggs and that it caused cancer. "Fighting the rumors," says Life Savers President William Mack Morris, "was like punching air."

The 45-year-old executive at first ignored a scattering of letters from children—he thought they were a prank. (The first one went: "Dear Sir, I have herd there are siper eggs in your bubbleyum. If so, they are very tasty. Michael.") But when retailers and reporters last month began to bother his New York office with questions, Morris became convinced that "this prank was serious."

"The rumors," he says, "spread quickly in a small area"—New York City, Long Island, Westchester, Northern New Jersey, Southern Connecticut and Eastern Pennsylvania. "My problem," says ex-Marine Morris, "was to find out where they started." He hired private investigators—their confidential report is due this week—and he took out ads in 30 papers at a cost of about $60,000 to warn: "Someone is telling your kids very bad lies about a very good gum." (There was no evidence that the rumors were floated by business rivals.)

Morris—a Princeton graduate who lives with his wife, Mauny, a daughter, Julie, 17, and a son, Bill, 12, in Riverside, Conn.—claims the rumors hurt sales but didn't affect profits "since we haven't been able to make as much gum as we could sell."

The decision to campaign publicly against the reports—rather than simply hope they'd go away—was difficult. "I have to admit," Morris says, "I didn't study rumors in Marketing 101." The pressure began affecting his personal life. "I slept about three hours longer every night," he says, "because I never knew what I would have to deal with the next day."

When he read a New York Times editorial in support of his company, Morris says, "I was almost in tears." Now the rumors appear to be diminishing and sales are bouncing back. A few days ago Morris sat in his office trying with limited success to blow a bubble. "I don't care about bubbles," he finally said. "I care about the gum."