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Non-Tech : Bill Wexler's Trading Cabana
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From: Bill Wexler5/30/2008 4:38:33 PM
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CAKE... caught my attention when they issued that odd press release in March about how they were borrowing $100 million to "help repurchase stock". I've visited several of the restaurants. It's obvious that traffic is way down and their input costs are going through the roof. In several cases (such as Boca Town Center mall near me) there's both a Cheescake Factory AND a Grand Lux Cafe in the same mall. The menu differences are slight, and overall quality has been declining.

The stock's at 20 and the debt load is rising fast. I have little doubt the shares are going to crater. The company is going to have to raise more money somehow, so the fact that they're doing roadshows tells me that they're going to try to float another offering -- a convertible more likely than not
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