I've been checking out a restaurant called Hotel Discovery (HOTD and HOTDW) for the last few weeks. Right now they have only one restaurant, in Cincinnati, that's used more as a laboratory to experiment with. What they come up with will result in the second restaurant that goes up sometime this spring at the Mall of America, 3rd floor south food court. I went to check out the location, and it seems to be in a pretty good spot one floor directly below the movie theaters.
HOTD is positioning themselves to be an adult version of Rainforest Cafe, complete with alcohol service, and a pricier menu than Rainforest. Senior management has oodles of restaurant experience, and the executive chef formerly worked at Palomino, a highly acclaimed "upscale-casual" restaurant in downtown Minneapolis.
I talked to Dennis Nielsen, the Research Director at R.J. Steichen, the people who brought HOTD public. He said that HOTD is essentially a Rainforest clone except for the fact that it's not really family oriented. He also expressed some concerns that HOTD went public too soon, several months before the Mall of America restaurant opens.
HOTD's story sounds kind of neat to me. I read recently that as the theme restaurant industry becomes more competitive, the quality of the food will matter more, which is the direction HOTD is headed towards.
All three belong to this stock. The unit is actually a combination of one common share (HOTD) and one warrant (HOTDW)- an option to purchase an additional share of the common at a specified price (or a conversion of the warrant to a common share). This was done with DAVE (DAVE, DAVEU, DAVEW). Theoretically, (HOTD + HOTDW)=HOTDW. If you try to calculate it, there will usually be some imbalance. Be aware however, that purchasing a warrant (HOTDW) is not really a stock purchase. It will entitle you to purchase one share of common stock at a specified price (called exercising the warrant). When the warrant is "called", you can either cough up cash and exchange the warrant for a share of common, or sell the warrant at the prevailing market price. There is a 3rd option: do nothing, and the warrant expires and you get nothing (not a good long-term strategy). Check this out yourself by pulling up DAVE, DAVEU and DAVEW. I hope this long-winded explanation was useful.