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Non-Tech : Cafe Odyssey (CODY) -- Ignore unavailable to you. Want to Upgrade?

To: Mesaba who wrote (49)	4/6/1998 5:31:00 PM
From: Mojo	Respond to of 97

Please be very careful when someone gives you advise on investing. The information someone gives you won't always pertain to your situation. Since HOTD involves a high degree of risk and substantial dilution it is imperative that you devise a solid game plan before you purchase the stock. Even though it is impossible to forecast the future especially in the stock market, you have to know what action you will take in the event the stock will rise or fall. You also have to have a solid understanding of what you purchased. This is also my first time purchasing units. I don't know how much you know about warrants, but let me try to elaborate on my last message. I will start with the basic definition. Warrants grant the holder the privilege to subscribe to the common stock at a fixed price. The value of a warrant is determined by two factors: intrinsic value and time value. Normally warrants are exercisable for a long period of time. Warrants are often exercisable for ten years or more and some are perpetual. This time factor makes warrants an attractive vehicle for potential capital gains. In the case of Hotel Discovery we don't have time on our side. If you read the Prospectus it states that the warrants are subject to redemption by the company on 30 days written notice, provided that the average closing bid price of the common stock exceeds $7 for any 14 consecutive trading days prior to such notice. Now let me give you a hypothetical situation. Lets say today you buy 100 units of HOTDU at $4 a unit. The common stock is worth about $3 and the warrant is about $1. Your initial investment is of course $400. Now lets say Hotel Discovery opens up and there is a line wrapping around the Mall of America of people waiting 5 hours to dine. Everyone now wants a piece of the action and the stock skyrockets from $3 to $12 and the stock has been above $7 for 14 consecutive days. The company is now going to call the warrants. The units split and now you have 100 shares of common stock and 100 warrants. The warrants have an intrinsic value of $5.50 a piece ($12.00 minus $6.50). The warrants will now be trading somewhere around $5.50. Now you have 30 days to sell the warrants or to buy an additional share of common stock for $6.50. If you wait longer than 30 days the company will give you one penny for each warrant so you will get $1 for 100 warrants. Of course you don't want that! Now if this is the situation we are presented with down the road or a situation like this (I hope everything turns out like this), I would suggest selling the warrants. Again I will use my hypothetical scenario. Sell the 100 warrants at $5.50. Now at this point you will have $550 minus $400 initial investment for a profit of $150. Not a bad return already! Don't forget the 100 common shares you still own are worth $1,200 of pure profit since you already got your initial investment out selling the warrants. If the stock does well and the units split you could of course trade in your warrants and buy additional shares if you think the stock will continue to rise. This is a risky stock however. If the situation presents itself why not sell the warrants and get your initial investment out and maybe a little profit while still owning the common shares. Please realize that the warrants for Hotel Discovery are not the same as warrants for other companies. The warrants have very little time value. To promote IPO's companies will throw in an additional incentive sometimes. You have to read all the little details in the prospectus to understand how valuable the incentive is. Hope this message is helpful!

To: Mesaba who wrote (49)	4/7/1998 10:45:00 PM
From: sliptrade	Respond to of 97

I recently purchased the Units in addition to the shares. If you followed Famous Daves (DAVE) the warrants were exercised in about a year. The Units do provide a higher degree of risk but also may provide a nice reward soon after the restaurant opens. This IPO should just be coming out now. I participated in RJS IPO and sold the same day for a small gain. The broker I deal with over there predicted the price to decline to current levels. It probably wont get much cheaper with the opening date approaching in June.