Steak'n Shake Quarterly Results Will Be Out Today

[Munger_Disciple]

I do not currently own any SNS stock, but I am really against things like the name change and the reverse split. These are totally cosmetic changes and have nothing to do with increasing the intrinsic value of the business.

[kilroy04]

Suspiciously smells of hubris........and likely many years before it wouldn't be viewed that way (even if he continues to be successful). Seems this characteristic could portend risk of overconfidence in some investment moves.

[txlaw]

I think it is actually a pretty big deal.  I invested in Steak'n Shake under Sardar's stewardship, not Biglari Holdings.  Nor did I ever expect the board to approve a name change that throws such accolades on the CEO.  It's like changing the Indianapolis Colts to the Biglari Colts if Sardar was the general manager and won the Superbowl...doesn't that sound quite ridiculous?  By changing names would the Colts be making perfectly clear to the world what their future goals are?  Would free agents be less likely to sign with Indianapolis Colts, but more likely with Biglari Colts?  Or would they just care about being taken care of and winning a Superbowl?  What if Sardar gets hit by a bus...do you change the name back to "The Steak'n Shake Company"?

 

I don't think your Colts analogy holds true in this case.  Biglari is not changing the name of the burger franchise -- that remains Steak 'n Shake.  If he were changing it to "Biglari's Burgers," then maybe I'd agree with your analogy, but he's not.  He's changing the name of the holding company, which owns a lot of different businesses and is going to be quite different than just a company focused on the fast food business going forward. 

 

The crux of the issue is that he attached his own name to the holding company's new name.  If he had changed it to "SNS Holdings" or something like that, I don't think we would be having this discussion. 

 

You view the name change as unnecessarily throwing accolades on Biglari for turning around the Steak 'n Shake company.  But I think it's more than that.  First, I think it's an acknowledgment by the board that Biglari has totally transformed the vision of the company from being a fast food operation to a diversified conglomerate that will go anywhere to maximize the risk adjusted returns for its shareholders.

 

Second, I think that it's a way to get Biglari to be even more invested in the company's doing well than he already is because his and his family's reputation will be on the line going forward.  At this point, Biglari has come to control SNS by using other people's money (OPM) to become an activist investor.  And even though he is CEO of SNS, he still has a lucrative business on the side -- the Lion Fund -- that will sustain his financial needs for a long time even if he decides to wash his hands of SNS, for example by selling the franchise after turning it around.  By letting him name the holding company Biglari Holdings, I think the board is telling him (agreeing with him?) that this public holding company should be Biglari's primary business.  It's also why I think Biglari will eventually wind down the Lion Fund and concentrate fully on running the public holding company, whatever the name ends up being in the end.

 

I guess we're just going to have to agree to disagree on this.

 

On top of that, it's a completely unnecessary distraction to such a spectacular job they've done in the 1st Quarter.  I don't think the board thought through the ramifications of this decision very clearly. 

 

I agree that the timing of the name change is very, very poor.  We're all hypersensitive to the fact that many (most?) people who control OPM have extracted wealth from their clients/shareholders/investors without giving much in return, in some cases chuckling to themselves about how much it was like taking candy from a baby.  And let's not forget about how taxpayers and the real economy have suffered as a result.  People are angry -- and rightfully so. 

 

Is it any wonder that people are confused and angry that Biglari has chosen to name the company after himself at this time?  That shows a certain level of tone deafness on his and the board's part.  Or perhaps it's just flat out defiance of the general attitude of people towards financiers and management at this time.

 

I dunno.  I certainly wouldn't have changed the name to Biglari Holdings at this time if I were him. 

[DCG]

I don't like the name change, but my bigger concern is the fact of him really focusing on being a holding company while being the CEO of Steak 'n Shake. One man can only do so much, and I don't want to see him already giving up control over Steak 'n Shake to focus on other investments, etc.. And is he going to continue to run the Lion Fund as well?

[Daytripper]

I don't like the name change, but my bigger concern is the fact of him really focusing on being a holding company while being the CEO of Steak 'n Shake. One man can only do so much, and I don't want to see him already giving up control over Steak 'n Shake to focus on other investments, etc.. And is he going to continue to run the Lion Fund as well?

 

I would think that as time moves forward, Sardar will have to find somebody to run Steak N Shake so he can concentrate on building BH.

 

I just had dinner at my local SNS in Leesberg, FL.  Gus Belt's story is still on the front of the menu. The picture of Sardar and the wait staff is in good taste.  I guess I'm just not cynical enough to think that a CEO associating themselves with the businesses that they operate is a bad practice.

 

Some of Berkshire's sub's identify themselves as "a Berkshire Hathaway Company".  I associate that as a mark of quality, I and hope that Biglari does the same.

[DCG]

I don't like the name change, but my bigger concern is the fact of him really focusing on being a holding company while being the CEO of Steak 'n Shake. One man can only do so much, and I don't want to see him already giving up control over Steak 'n Shake to focus on other investments, etc.. And is he going to continue to run the Lion Fund as well?

 

I would think that as time moves forward, Sardar will have to find somebody to run Steak N Shake so he can concentrate on building BH.

 

I just had dinner at my local SNS in Leesberg, FL.  Gus Belt's story is still on the front of the menu. The picture of Sardar and the wait staff is in good taste.  I guess I'm just not cynical enough to think that a CEO associating themselves with the businesses that they operate is a bad practice.

 

Some of Berkshire's sub's identify themselves as "a Berkshire Hathaway Company".  I associate that as a mark of quality, I and hope that Biglari does the same.

 

The difference is Buffett always (well, almost always) bought companies with great management in place that would remain with the company. With Steak 'n Shake, Bilgari bought a company with seemingly bad management, and BECAME the biggest part of its management.

 

I also question whether he will end up issuing new shares to fund his future acquisition ideas.

[bargainman]

The difference is Buffett always (well, almost always) bought companies with great management in place that would remain with the company. With Steak 'n Shake, Bilgari bought a company with seemingly bad management, and BECAME the biggest part of its management.

 

I also question whether he will end up issuing new shares to fund his future acquisition ideas.

 

Hmm I seem to think this wasn't true in the early days.  Buffett participated in a number of companies where he had to strong arm management into doing what he wanted.  I forget the exact company names, but Snowball mentions at least a few of these cases.

[Zorrofan]

Perhaps the best course of action would be for someone - such as Sanj, who has spoken to Sardar in the past - to contact him and ask for more information about why he chose the name the did?

 

just a thought..... :-\

 

cheers

Zorro

 

I don't like the name change, but my bigger concern is the fact of him really focusing on being a holding company while being the CEO of Steak 'n Shake. One man can only do so much, and I don't want to see him already giving up control over Steak 'n Shake to focus on other investments, etc.. And is he going to continue to run the Lion Fund as well?

 

I would think that as time moves forward, Sardar will have to find somebody to run Steak N Shake so he can concentrate on building BH.

 

I just had dinner at my local SNS in Leesberg, FL.  Gus Belt's story is still on the front of the menu. The picture of Sardar and the wait staff is in good taste.  I guess I'm just not cynical enough to think that a CEO associating themselves with the businesses that they operate is a bad practice.

 

Some of Berkshire's sub's identify themselves as "a Berkshire Hathaway Company".  I associate that as a mark of quality, I and hope that Biglari does the same.

[rogermunibond]

I believe the name Biglari is a family name.  As such Sardar did not chose it, it chose him.  ;)

[Parsad]

Perhaps the best course of action would be for someone - such as Sanj, who has spoken to Sardar in the past - to contact him and ask for more information about why he chose the name the did?

 

I sent a letter to the board of directors yesterday.  I'm sure it will be addressed at some point...be it beforehand or at the AGM.  Cheers!

[valuecfa]

Perhaps the best course of action would be for someone - such as Sanj, who has spoken to Sardar in the past - to contact him and ask for more information about why he chose the name the did?

 

I sent a letter to the board of directors yesterday.  I'm sure it will be addressed at some point...be it beforehand or at the AGM.  Cheers!

 

Did you throw in a few alternatives?

 

Western Holdings sounds like a more appropriate name, given that is where it all started.

 

Or, if he wants to keep his name attached then,

 

Sizzlin Biglari  ;D

 

 

[ragnarisapirate]

Perhaps the best course of action would be for someone - such as Sanj, who has spoken to Sardar in the past - to contact him and ask for more information about why he chose the name the did?

 

I sent a letter to the board of directors yesterday.  I'm sure it will be addressed at some point...be it beforehand or at the AGM.  Cheers!

 

Did you throw in a few alternatives?

 

Western Holdings sounds like a more appropriate name, given that is where it all started.

 

Or, if he wants to keep his name attached then,

 

Sizzlin Biglari  ;D

 

 

 

I'm with ValueCFA... do you care to post the letter, Sanjeev?

[Parsad]

I thought about posting it, but I'm not sure the board of directors at SNS would appreciate that, so I decided against it.  Cheers!

[sdev]

Name change aside...the cash from operations-capex number is eye popping!