BH - Biglari Holdings

[LC]

Shareholders that did not pony up more cash were not screwed, they sold their Rights and received a one-time (large) cash dividend.  If they hung on to their remaining shares, they too would benefit from the buyback, provided that the shares were purchased at a discount to their intrinsic value.

 

You wrote: "You better hope some are willing to sell."  Yes, that is indeed a requisite part of any share buyback, some shareholder surely have to be willing to sell.  But, of course, there are always shareholders selling - this is not a real issue or concern.  I can guarantee you that shares of Biglari Holdings will trade the next day the market is open and the day after that, etc..  Just the way there are shares of Berkshire that are certainly going to trade the next day the market is open and the day after that, etc.  This is a different conversation, but I've always thought there should be days when no Berkshire shares would be trading.  If everyone was a value investor, there would be many many days with no shares trading because the estimates of intrinsic value do not swing very quickly.  But, alas, most market participants are not value investors and hence are much more prone the trading.

To the first point: Only if the rights are priced appropriately. I don't follow BH so I don't know if they were.

 

To the second: My issue is with  using shareholder money to buy shareholder shares, not whether shareholders agree to sell or not. Most companies use internally generated cash to perform buybacks, or debt if they are that confident. Buffett IIRC acted as a personal banker to his shareholders when they needed cash.

 

Imagine if it happened at an annual meeting. Biglari up at the podium saying, "OK, hi guys, thanks for coming, now everyone we all have to chip in a few hundred bucks per share so that I can buy some of you guys out."

[cooger72]

Couple of points. Your illustration assumes the market gives the company credit for half the proceeds from the rights offering. Such an outcome would seem undesirable. Assuming you get $500 of market value increase post offering and the new share price for 4 shares is $375 each, the seller's shares go for $750, and the remaining shareholder owns a 1750 IV co. After all, clearly something destructive happens if we chip in $500 but the market is only willing to increase its bid by $250.

 

The same result could be had by the company doing no offering and buying $250, while the remaining shareholder pays $250 for the other half share.

 

Agreed that a company that needs to raise capital can do it equitably with a rights offering, but a should company looking to repurchase shares be raising capital by issuing them?

 

What's the point of such a raise other than to decrease the efficiency of the market for the issuers shares?

 

Sorry if I offended you by assuming you were a man.

[LC]

But if the market price is undervalued, then so are the rights because they are "efficiently" priced based on that undervalued market price.

 

The rights offering, like any rights offering, is just a way to raise money from shareholders. It's wealth-neutral. He's using the money to fund buybacks. He's just trading his own stock with OPM. That's not what I'm looking for in a business partner.

 

He's saying, "guys our stock is undervalued I'm forcing you to give me the money to buy it". (Oh, he's not really "forcing you": you have the option to sell your right instead...just at an undervalued price)

 

[Txvestor]

The issue here is the dilution of ownership interest for non participating partners, merely to gain $$ which are then funnelled into a hedge fund.

Of course the action for those who participate, serves to concentrate their position with additional paid in capital, whether that be going up or down. If the shares are currently overvalued for whatever reason(including Mr Biglari's actions) then the loss will too be magnified in due course. Worse yet it will be magnified with additional paid in capital. Pity those that have ever taken a full position with Mr Big. as year after year they will have to fork over cash or be diluted. That's one way to compound I suppose. ;)

If the best use of capital is a buyback of his own shares, the implication is that CBRL is even more undervalued, since he is not touching those shares, and instead using funds from a rights offering. Thats a real heck of a stretch. It would take ascribing a generous dose of good motive to compare those two actions and say a rights offering followed by buyback was the better choice for shareholders vs selling CBRL shares to buy BH. Of course that would have meant the small matter of outflows from the lion fund to accomplish.

Only in the world of empire-building is that good motive reasonable to assume. Those that repeatedly point to the upstreaming of 300million by SNS to BH, ignore the fact that much of that remains leverage on SNS books. It was not all cash flow, it was debt. Not the same thing.

Finally Mr Big is buying back these BH shares via the lion fund whereas he raised these funds from the public vehicle that is BH. So he is skimming performance fees off your new capital for a fairly straightforward and plainly obvious investment(in your opinion). So realistically you are not even getting full credit for the dollars you have put into it. The hurdle further went up significantly due to that action alone.

Reading the thread, it is obvious that people are hardened in their views. Those that are invested seem willing to defend any action of Mr Big. Even as they acknowledge the eccentric nature and shareholder unfriendly nature of some actions, they nevertheless find those worthy of overlooking. And of course those who have sold see things very differently. Ultimately time will tell.

[giofranchi]

I wish you luck my friend.  Beware of the wolf in sheep's  clothing.  Sheep's clothing= marketing like berkshire to capture niche investors that only path to riches is to catch the next brk early.  Wolf=  Cognitive dissonance with words vs actions and true intentions slowly revealing itself hiding behind the veil of IV and buffett quotes.  Most of us the early investors in SNS would still be in if it wasnt for the cognitive dissonance of Mr. Big. 

 

For me to tolerate cognitive dissonance of biglari is equivalent to me tolerating a cheating spouse. Raise your hands who would tolerate that? Is self worth that low?  Is the  berkshire business model that beautiful trophy wife that can get away with anything because shes a beauty and having her increases your self-worth. Merry Xmas

 

I think the world is full of people who live their business life like they should be living their personal life instead, and who live their personal life like they should be living their business life instead… I have always found it quite sad…

 

Anyway, from all these criticisms of yours rest assured that I have taken away at least one lesson: Biglari must be watched closely, and each one of his business and investment decisions must be scrutinized with great attention…

 

Luckily, in this regard BH should be easy enough to monitor! In each coming year I would expect no more than:

a) 1 or 2 major stock market investments;

b) 1 or 2 purchases of whole businesses;

c) 1 or 2 significant strategic decisions for the businesses already owned.

Furthermore, Biglari seems to like writing very extensively about business and investment decisions. Therefore, there will always be plenty of material to judge the soundness of his involvement in a few “big” ideas. As I have said, I expect no more than 5-6 “big” ideas each year (probably less!), and I think I will encounter no trouble in analyzing them thoroughly and in arriving at my own informed opinion.

 

If and when I start to doubt the quality of Biglari’s business and investment decisions, I will sell my investment… without even bothering to ask why they have so much deteriorated… ego, arrogance, or whatever the true reason might have been! ;)

 

Gio

 

[Hielko]

I don't think you understand why Biglari is taking a stake in Air T and Insignia since Groveland and Biglari are absolutely not at the same side of the equation. Biglari is taking a stake in those two companies to punish Groveland for trying to gain influence at BH and to deter other parties from trying to take his control away. Any scenario that would be a win for Groveland would be the worst possible signal that Biglari can send.

 

From a game theory perspective he should be willing to act and even overreact seemingly irrational versus Groveland in order to prevent a more costly scenario when a more serious actor would try to gain control. The best possible outcome for him would probably be that Air T and Insignia would go to zero as a direct result of his actions. A second best scenario would be that he would be able to gain control and be able to screw the non-controlling shareholders (that would include Groveland). The most realistic outcome is probably that he will try to block everything that Groveland Capital tries to do at both companies to unlock value.

 

Biglari's involvement in Air T and Insignia is reducing the value of both companies: they are just the collateral damage in the control game for BH.

[Sportgamma]

It also signals that if you're a small cap activist and your stuck in a position the best way to get out of it is to file the necessary activist filings on BH and he'll be more than willing to solve your problem.

[Hielko]

So H.ko. seems to believe that Biglari is an absolutely, utterly brilliant investor and stock market wizard.

It helps if you read what I write. I'm saying that that outcome would be good for him, not that he will be able to achieve it. As matter of fact I write that the most likely scenario is probably the least extreme where he just fucks with Groveland and tries to block whatever it is they try to do.

 

That he will be able to have a negative impact should be crystal clear when you look at Air T. The company is already under control of Groveland Capital and they are in charge of capital allocation decisions. Involvement of another activist investor has zero added value at this point, and now the company is already spending money on lawyers. Creating a poison pill isn't free, and it is also taking time from Groveland Capital that otherwise could have spend more productive. If BH would for example start a proxy fight it would mean more costs and more distractions. At Insignia he could probably have an even bigger influence since he now has a bigger stake than Groveland Capital and the company recently entered a standstill agreement with Groveland.

[TheValueDude]

Off-topic: Has anyone eaten at a Steak n Shake ever?  I haven't and I'm just wondering is it even good?

 

I like it. They actually cook your burger on a flat top in front of you, which is more than you can say for almost any other fast food restaurant. Having said that, it is a $4 hamburger and fries, so expectations should probably be tempered. It's no In 'N Out (gold standard IMO).

[randomep]

Off-topic: Has anyone eaten at a Steak n Shake ever?  I haven't and I'm just wondering is it even good?

 

I like it. They actually cook your burger on a flat top in front of you, which is more than you can say for almost any other fast food restaurant. Having said that, it is a $4 hamburger and fries, so expectations should probably be tempered. It's no In 'N Out (gold standard IMO).

 

I had never heard of shake and steak until I learned of Biglari and I made it a point to visit one when I was in NC. My impression is that it tries to look like a Mel's diner. But it is definitely lower end menu.  They were very crowded and I saw Biglari's emphasis on moving people in and out quickly. But in the end it is a low end diner, a typical meal is probably same cost as one in McD's. The service was soso but hey they try.

 

And so I came away with the impression that ok Biglari did good to squeeze out more cashflow from the business. But I just cannot imagine it expanding and being nationally recognized chain. It has a place, but in middle america there are many chains like that which you wouldn't see elsewhere.

 

And as for Biglari the stock picker, I know he did great with cracker barrel, but I don't know of any other great picks so CBRL may be just a one-off. So I cannot justify giving him 25% over 6%. Here is a man who has two chains to run, is picking proxy fights, is arrogant as hell and you say he will give me above average returns after he lops of 25%? I am just not convinced.

 

And some here also mentioned that BH is selling way less than IV, well in this day of go-anywhere investing, we can find lots of well performing companies that sell below book, IV or even netnet. BH just isn't compelling to me and that's why I passed on it.....

 

 

just my 2 cents

 

 

 

 

 

[randomep]

Hi NBL,

 

I see SNS as a niche chain. They sell cheap burgers, fries and shakes

in a atmosphere that reminds you of the 50s.  That may work in middle

america but there are also half dozen other chains competing like that.

I even saw a commercial touting their 1/2 price menu which runs from

2-5 am/pm.  But society is getting wealthier, lots of people can

and want to enjoy a meal over $4. For example if I want to have that

type of food, I'd go to mel's diner, their skillets are amazing.  Just

my opinion, I would never go to SNS again.

 

As for Biglari, I confess I don't know too much about him. I had to

make a call with the limited information I had. But let's suppose

for a moment that his 20+% early on is true. If he can do that now

(pre performance fees) it means the following. He is worth I guess

100M. If he can compound his money at 20% and charge performance fees

for the lion fund then he should be able to compound his money at

25%. At that rate he will be a billionaire in 10yrs, what more

does he want? He should just be a full time activist money manager

instead of operating SNS and trying to nickle and dime his shareholders.

 

 

..... a person who does 20% with 1M will do 12% with 100M... IMHO...

unless you are Ackman or Buffett or Burry or Munger ...

 

 

And as for my own investments, I have a blog (below), I have for example

New Century which trades at $0.15 and has about $0.08 cash and $0.07 public

securities in HK and singapore exchange. AND they have around $0.08 of

real estate in HK and southeast asian AND no debt.  I am not a

superstar investor like some here, I am just looking for steady eddy

good returns. BH is just too much risk vs. DIY.

 

I was looking at BH a month ago but decided to pass but I definitely

wanted to see SNS to learn and see what the fuss was about....

 

http://bovinebear.blogspot.com

[randomep]

NBL,

 

I see we have some differences of opinion. I gave some time to BH and considered it and passed and I just posted my 3 reasons. I have limited experience and information but I have to make a call. But I do want to make the best decision that I can see fit as if my call is wrong, then I missed out on a fine opportunity. If I am wrong I'd like to know.

 

  But I'd like to re-iterate my point on SNS. I feel that going cheap on food is a very difficult proposition, because we can only have 3 meals a day. And we eat enough. Unlike your walmart example which you can argue helped people have more toys, cloths and cheap furniture.  So the end result is that we won't consume more food but will pay more for perceived value. As a result some we are wasting money on little or no value. For example, bottled water, high end coffee at starbucks. And if SNS is 90% as good as Mel's diner but at 1/2 price I'd still go to Mel's because today I can only eat one dinner and I want to maximize the enjoyment.  It is quite an obvious trend to me, we are making up new meanings for value in food so we can "waste" money: non-slave labour chocolate, organic food, free range pigs, etc

 

On the other hand, I would buy a non-name detergent or the same detergent at a cheaper price at Walmart.  Also, Walmart has revolutionized retail because it mastered supply chain, imports from china, etc, which scales.  SNS is not changing how food is made on the farm, it is offering food in the last mile, which is very labour intensive, so I don't see any economies of scale. 

 

But in the end, we don't know what will happen SNS, maybe you can laugh at my post in 5 years when SNS is 2000 stores. 

 

Also about my "assume he did get 20%", I don't know what is the fuss.  I simply said I'll give you the benefit of the doubt, let's say he did get 20% THEN next this and that. I am sorry if it offends you that I imply I don't believe you, I didn't say that I just said I am netural and want to move on as this is a very time consuming post.  How about we just remove it from from our collective memory. 

 

And lastly, I originally posted here only in response to someone asking about experiences at SNS. And in addition I added my views on why I passed on BH.  My choices of words may be off but in the end, I don't think I want to research more on Biglari, if anything BH belongs in the "too hard" pile.

 

[randomep]

 

NBL,

 

You have good points. SNS and BH are interesting like SHLD, I'd really like to see how it plays out over the next few years. No matter what happens, I am going to learn something.

 

cheers

[giofranchi]

SNS and BH are interesting like SHLD

 

It is difficult to say how successful SNS might become through franchising in coming years… Maybe NBL is right… Maybe rando is right instead…

 

But imo this misses the point: to build wealth over time you don’t really need to enjoy fantastic cash flows, in other words you don’t need a monopoly… Of course, if you have a monopoly, your process of building wealth gets much quicker! A monopoly is a wonderful thing to have!… But almost by definition very few people in this world have one… Right?

 

Another way to build wealth, albeit surely a much slower one, is to have a business which generates not very high but predictable and steady cash flows, and to invest those cash flows shrewdly.

 

This is what I am trying to do myself with my own company, and what I think Biglari is doing with much greater success.

 

Please consider that to say SNS will succeed in opening 239 new franchisee units in the next few years, and to say SNS will generate predictable and steady cash flows, are two very different things. To the first one I wouldn’t even know which probability to attach, to the second one, though not a sure thing, I would certainly attach a very high probability.

 

That’s why I have never invested in SHLD… because, where are the predictable and steady cash flows?!

 

Cheers,

 

Gio

 

[BTShine]

I have a question for the board.

 

If BH decided to sell its shares in BH (via the Lion Fund) does BH have to pay taxes on any gains? 

 

 

[Kuhndan]

A BH SEC filing on 12/16 disclosed the plan (a portion is cut  and pasted below). The company just did a rights offering where BH received $250 per share, transferred the money to the Lion Fund and now They are going to start buying back stock at $400 a share? Does that make any sense?

 

On December 17, 2014, the Lion Fund entered into a Rule 10b5-1 Trading Plan (the “Purchase Plan”) pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  Under the Purchase Plan, a broker dealer will make periodic purchases of up to an aggregate of 62,000 Shares on behalf of the Lion Fund at prevailing market prices, subject to the terms of the Purchase Plan.  This description of the Purchase Plan does not purport to be complete and is qualified in its entirety by the text of the Purchase Plan, a copy of which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

 

[Txvestor]

A BH SEC filing on 12/16 disclosed the plan (a portion is cut  and pasted below). The company just did a rights offering where BH received $250 per share, transferred the money to the Lion Fund and now They are going to start buying back stock at $400 a share? Does that make any sense?

 

On December 17, 2014, the Lion Fund entered into a Rule 10b5-1 Trading Plan (the “Purchase Plan”) pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  Under the Purchase Plan, a broker dealer will make periodic purchases of up to an aggregate of 62,000 Shares on behalf of the Lion Fund at prevailing market prices, subject to the terms of the Purchase Plan.  This description of the Purchase Plan does not purport to be complete and is qualified in its entirety by the text of the Purchase Plan, a copy of which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

 

Yes - this makes a lot of sense if the shares are undervalued.  It wouldn't make sense if the $250 share price was offered to the general public, meaning non-BH shareholders, but since the $250 per 5 rights was offered only to shareholders - that is not relevant to the market price the company is now re-purchasing their own shares at.  The critical question for the share buyback (at least in economic and investing terms, their may be an ethical question regarding the timing of the buyback announcement), is whether BH's shares are undervalued.  If so, then buybacks are value creating.  (There is also a secondary question of whether, even if the shares are undervalued, this is the best use of capital - meaning the use of capital that generates the highest return.)  Further, once the Rights Offering was completed, the proceeds are the company's to allocate; the only question then is - what use of the capital creates the highest return on capital.  Thinking about where the funds came from at that point is actually akin to the sunk costs fallacy.  Thus, if BH's shares are indeed undervalued, as presumably their shareholders believe they are, then the buybacks are a good use of capital.

 

Obviously there is a difference of opinion whether this is ethical behaviour. Your assertion that once the funds are raised they are Mr. Bigs to allocate as he sees fit is non sense. Presumably there is a token BOD tasked with upholding all shareholder interests.

The funds raise was done under the implicit threat of dilution, and then instead of a straight buyback, he transferred them to his hedge fund to gain from a capital raise which he probably could not do on his own accord due to his perpetually eroding reputation.

You apparently believe in the company and Mr Big, and presumably have your money where your mouth is, I am not here to convince anyone of anything, but incessantly defending self serving behaviour, trying to spin things and furthermore calling it a plus for shareholders is complete BS. Mr Big raising funds that way to then transfer into his hedge fund is NOT in shareholders interest.

 

 

 

 

[TheValueDude]

A BH SEC filing on 12/16 disclosed the plan (a portion is cut  and pasted below). The company just did a rights offering where BH received $250 per share, transferred the money to the Lion Fund and now They are going to start buying back stock at $400 a share? Does that make any sense?

 

On December 17, 2014, the Lion Fund entered into a Rule 10b5-1 Trading Plan (the “Purchase Plan”) pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.  Under the Purchase Plan, a broker dealer will make periodic purchases of up to an aggregate of 62,000 Shares on behalf of the Lion Fund at prevailing market prices, subject to the terms of the Purchase Plan.  This description of the Purchase Plan does not purport to be complete and is qualified in its entirety by the text of the Purchase Plan, a copy of which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

 

Yes - this makes a lot of sense if the shares are undervalued.  It wouldn't make sense if the $250 share price was offered to the general public, meaning non-BH shareholders, but since the $250 per 5 rights was offered only to shareholders - that is not relevant to the market price the company is now re-purchasing their own shares at.  The critical question for the share buyback (at least in economic and investing terms, their may be an ethical question regarding the timing of the buyback announcement), is whether BH's shares are undervalued.  If so, then buybacks are value creating.  (There is also a secondary question of whether, even if the shares are undervalued, this is the best use of capital - meaning the use of capital that generates the highest return.)  Further, once the Rights Offering was completed, the proceeds are the company's to allocate; the only question then is - what use of the capital creates the highest return on capital.  Thinking about where the funds came from at that point is actually akin to the sunk costs fallacy.  Thus, if BH's shares are indeed undervalued, as presumably their shareholders believe they are, then the buybacks are a good use of capital.

 

Obviously there is a difference of opinion whether this is ethical behaviour. Your assertion that once the funds are raised they are Mr. Bigs to allocate as he sees fit is non sense. Presumably there is a token BOD tasked with upholding all shareholder inerests.

The funds raise was done under the implicit threat of dilution, and then instead of a straight buyback, he transferred them to his hedge fund to gain from a capital raise which he probably could not do on his own accord due to his perpetually eroding reputation.

You apparently believe in the company and Mr Big, and presumably have your money where your mouth is, I am not here to convince anyone of anything, but incessantly defending self servig behaviour, trying to spin things and furthermore calling it a plus for shareholders is complete BS. Mr Big raising funds that way to then transfer into his hedge fund is NOT in shareholders interest.

 

Well put.

[jouni1]

so we're not allowed to post about companies we're not bullish on? seems reasonable.  ::)

[Txvestor]

NBL,

 

A few points.

 

Comparison of Mr Big. to Mr Buffett, is a great exaggeration and a false association. Which arguably Mr Big does himself in a number of ways that have been previously pointed out. Mr Buffett's track record of wealth creation and shareholder treatment is unparalleled, widely admired and speaks for itself, Mr Big's is far shorter and a lot more questionable at best.

 

My point is that the BH BOD is tasked with an oversight responsibility, and are to act in the interests of ALL shareholders and doing a rights offering capital raise to then transfer that money into the CEOs hedge fund and for them to allow that after shareholders clearly spoke on his incentive agreement is highly questionable oversight and discharge of fiduciary responsibility.

 

Someone who chooses not to participate in Mr Big's rights offering priced  below market value, is being forced to dilute their interest. That they get a one time taxable 'dividend' payment is akin to forced selling. Either action cannot be construed as shareholder friendly.

 

People spend their time as they wish. Kindly refrain from telling others how to spend their time and imputing motives on them. If I choose to observe a fiasco in action, and discuss the actions, as is the case with many of the posters on this thread, it is our prerogative to do so.

Your assertions and accusations about the motives are worthless. If you choose to reply do so, if not, then don't but refrain from suggesting to others how to spend their time. Likewise the way you spend your time is irrelevant to me.

 

 

 

 

[innerscorecard]

I was going through the history of John Malone and Liberty and suddenly thought that what John Malone did - screwing over other shareholders (down to increasing his initially small holding in Liberty by buying rights with money borrowed from the company) by purposely underpricing assets he would personally acquire, being purposefully opaque, etc. - are precisely what people have been criticizing Sardar Biglari for as well. That's not to say Biglari is Malone at all, or that what Malone did was ethical or not. Just food for thought.

 

And yes, I know that has been mentioned before...but some of the similarities from a ten thousand foot view are remarkably striking. As a Liberty shareholder, you have to constantly be on your toes in thinking about the different rights offerings and restructurings. And if these are undersubscribed, it seems as if Malone and other shareholders "take advantage" of the other shareholders and create value that way. Isn't that at the heart of the criticism of Biglari? Of course, you can think what both of them do is unethical. That would be a perfectly consistent position.

[WideMoat]

I was going through the history of John Malone and Liberty and suddenly thought that what John Malone did - screwing over other shareholders (down to increasing his initially small holding in Liberty by buying rights with money borrowed from the company) by purposely underpricing assets he would personally acquire, being purposefully opaque, etc. - are precisely what people have been criticizing Sardar Biglari for as well...but some of the similarities from a ten thousand foot view are remarkably striking.

 

I suppose from a ten thousand foot view the similarities between a chimpanzee and human are striking as well, but most are inclined to notice the differences... unless one has ulterior motives.

 

Just one relevant difference--Malone did not deposit the proceeds from rights offerings into his hedge fund.

 

To say that Malone "purposely underpric[ed] assets he would personally acquire" is a serious charge, one that many lawyers would love to act upon.  Please elaborate, because I am not clear what incident you are talking about.

[LC]

There was a youtube clip posted a few months ago from Malone's #2 (pre-Maffei) who pretty much said the complexity was due to the tax code, and at investor days they explained to analysts what 30 pages or so of the 600 page disclosures were important to look at. They were not trying to be opaque on purpose.

[Hielko]

FWIW: When I read Cable Cowboys last year I thought that Malone did some stuff that was questionable, but can't remember the specifics. Just remember that I wasn't particularity impressed with his behavior w.r.t. shareholders. I don't mind that he drives a hard bargain vs banks, towns, other corporations etc. Imagine that a lot of the litigation from that area was related to those aspects?

[merkhet]

If I recall correctly, Cable Cowboys did mention that people called TCI the Death Star and Malone Darth Vader -- but, of course, it's called Cable Cowboys and not Cable Devils, so some wistful romanticism is probably not surprising.

 

For what it's worth, for me personally, the big difference between Malone & Biglari is that with Malone, if you found yourself on the same side as Malone, you did just as well as he did. As a shareholder, you just subscribed when he had rights offerings, held on to his spinoffs, etc.

 

Biglari, on the other hand, introduces mechanisms into his company that benefit him above and beyond the other shareholders. For instance, introducing what amounts to a golden parachute in the form of a licensing agreement for his name, etc.

 

Of course, as I mentioned before, a large part of it could just come down to liking Malone better than Biglari. *shrug*