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Non-Tech : RAINFOREST CAFE
RAIN 2.350-2.4%Feb 2 3:26 PM EST
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To: jimleon who wrote (532)8/29/1996 2:49:00 AM
From: Dennis Vail   of 4704
 
Hi Jim,

Marshall's projection makes sense and would be my guess too but the latest S&P(8/24) has 10/10/96 as the next report date.As the quarter ends 9/30/96 that is possible.Another oddity in the S&P is that last month they had 9 companies offering coverage of RAIN but now they list only 2,Morgan Stanley and Value Line (1 buy&1buy/hold).The others are involved with underwriting this latest offering for the most part.

My concerns 2-3 years down the road are basically what I posted to Terry.That is circumstances may be pushing expansion before RAIN is adequately prepared and the possible downsides to that are things like shoddy construction,poorly trained staffs,delayed openings,unneccessarily long lines that alienate customers and reduce revenues,lower quality food preparation,etc.I'm not saying this will or is happening,only that its something to watch for and that one sign of it would be that the immediately scheduled openings for the remainder of '96 and early '97 are delayed and/or flawed in various ways.(I'm not even considering Strat,that one's a write-off to Murphy's Law)

What it comes down to is that in my mind RAIN is such a well-concieved and applied concept in its current manifestation that if it grows without lowering the quality of the product,it could well go on expanding and making us rich for decades.But if the Cafes are just slapped up one after another then the price of the shares will probably rise a lot faster for a few years on novelty and hype but there will be a day of reckoning.That's as fundamental as it gets.So let's keep our eyes open and our ears to the ground.

Dennis
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