BH - Biglari Holdings

[frugalchief]

And the two lawsuits were dropped...

 

http://www.sec.gov/Archives/edgar/data/93859/000092189515000662/form8k07428007_03182015.htm

[giofranchi]

Steak 'n' Shake reports 4.8% comp for Q4 • 7:07 PM

 

Clark Schultz, SA News Editor

Steak 'n' Shake reports same-store sales increased 4.8% in Q4.

Customer traffic was up 2.7% during the period.

The chain now has 24 straight quarters of positive same-store sales growth for one of the more impressive streaks in the restaurant sector.

Steak 'n' Shake is owned by Biglari Holdings (NYSE:BH).

 

 

Gio

 

[jimjam]

Hello, all. Long-time lurker, first-time poster.

 

Just a heads up. I hold my BH shares via Interactive Brokers and received an email today with the subject:

 

  "Proxy Contest Notice: Biglari Holdings Inc. - Groveland Group"

 

which includes a link taking me to an online voting form at https://www.proxypush.com/ where Swenson and company are listed as the "Management Recommended Vote" option.

 

It's unfortunate that the form was so confusingly designed to make it appear as if BH's management supports the election of Groveland! Perhaps I've completely misunderstood, but this appears borderline unethical.

 

I'd like to electronically vote my shares in favour of BH's management. Is there an easy way to do this is?

[gfp]

"I'd like to electronically vote my shares in favour of BH's management. Is there an easy way to do this is?"

 

Yes - just vote your shares through Interactive Brokers the way you would for any other vote.  The email to vote the management BLUE card was sent out by IB on March 18th.  Click "Voting Instruction Form" in that email and it will take you directly to the Blue card ballot.

[BTShine]

Steak 'n' Shake reports 4.8% comp for Q4 • 7:07 PM

 

Clark Schultz, SA News Editor

Steak 'n' Shake reports same-store sales increased 4.8% in Q4.

Customer traffic was up 2.7% during the period.

The chain now has 24 straight quarters of positive same-store sales growth for one of the more impressive streaks in the restaurant sector.

Steak 'n' Shake is owned by Biglari Holdings (NYSE:BH).

 

 

Gio

 

Thank you, Gio!  Great results for Steak N Shake.  That plan of high quality and low cost is clearly working. 

[gfp]

The Indianapolis Star has been covering this story for some time - kind of strange.  Here is their latest article -

 

http://www.indystar.com/story/money/2015/03/20/proxy-fight-steak-shake-gets-personal/24988923/

 

edit:  The New York Post has joined in the coverage as well:  http://nypost.com/2015/03/19/steak-n-shake-ceo-biglari-battles-rival-activist-over-burger-joint/

[Jurgis]

Biglari looks like the Terminator in his photos.  8)

 

"Vote for me if you want to live"

[OracleofCarolina]

http://www.forbes.com/sites/antoinegara/2015/03/20/the-implosion-of-a-warren-buffett-wannabe/

 

Mr. Bigs doesn't get much favorable press coverage.

[wescobrk]

Swenson actually claims in the latest 8k that Biglari Holdings is closer to bankruptcy today than in August 2008 when Sardar assumed control.

Is Swenson really that stupid?

I don't even know where to begin with that assertion.

God help BH shareholders if he pulls off a miracle and takes over the board with his million dollar stake.

 

[tombgrt]

So wait, people here are still voting for Biglari? Holy shit! Keep the topic alive guys, much appreciated...

[frugalchief]

Hello, all. Long-time lurker, first-time poster.

 

Just a heads up. I hold my BH shares via Interactive Brokers and received an email today with the subject:

 

  "Proxy Contest Notice: Biglari Holdings Inc. - Groveland Group"

 

which includes a link taking me to an online voting form at https://www.proxypush.com/ where Swenson and company are listed as the "Management Recommended Vote" option.

 

It's unfortunate that the form was so confusingly designed to make it appear as if BH's management supports the election of Groveland! Perhaps I've completely misunderstood, but this appears borderline unethical.

 

I'd like to electronically vote my shares in favour of BH's management. Is there an easy way to do this is?

 

I received our BLUE proxy cards from Biglari yesterday in the mail. 

 

Don't remember if we received the Groveland proxy cards with that first letter they sent.....if we did I think I burned them.  :o

[Jurgis]

So wait, people here are still voting for Biglari? Holy shit! Keep the topic alive guys, much appreciated...

 

I voted for Groveland.

 

Down with Big Government!  ;D  8) Vive la revolution!

[wescobrk]

So wait, people here are still voting for Biglari? Holy shit! Keep the topic alive guys, much appreciated...

 

I voted for Groveland.

 

Down with Big Government!  ;D  8) Vive la revolution!

 

Not sure if you're joking or not as the quote is funny.

It's good to have some people against Biglari so the board doesn't become an echo chamber.

Disagreement should be encouraged.

That being said, I'm still at a loss they think BH is closer to bankruptcy than in August 2008.

Financing was impossible in August 2008.

I really hope Swenson doesn't believe such a claim.

It'll be interesting to see the vote count.

I wish I could make some type of bet on him losing as Biglari will take zero chance of losing. He'll capitulate to Mario if he has to.

[Jurgis]

So wait, people here are still voting for Biglari? Holy shit! Keep the topic alive guys, much appreciated...

 

I voted for Groveland.

 

Down with Big Government!  ;D  8) Vive la revolution!

 

Not sure if you're joking or not as the quote is funny.

 

I really voted for Groveland. Not that it matters. Big will win.

[Jurgis]

But when someone says they own a stock for "entertainment" purposes, I can't help but think of that as poor stewardship.

 

and it hurts you so much that I voted my "two shares" for Groveland that you just have to respond with biting remarks.

 

Oh well. Back to my popcorn.  8)

[Jurgis]

Thanks for your deep psychological analysis about my investment style and goals. I did not realize that my presence on this board is offensive to you. I'll attempt to minimize my posts here in the future.

 

You also have an option to ignore my messages which are not directed at you actually.

[BTShine]

Well said NBL

 

Cheers!

 

 

[Parsad]

NBL, with due respect, I disagree with this sentiment.

 

I'm sure the incumbents are disappointed they lost the two shares held by the popcorn stock investor population.

 

Shalab, with respect, you misunderstood the sentiment.  What you suggested is not at all the sentiment I was sharing (this had nothing to do with stewardship or corporate governance) - but rather that the votes of people who are investing, in their own words, for entertainment purposes - are much less significant than anyone, no matter how large or small their share ownership is, who is reasoning through these issues and voting purely as an investor.  I haven't knocked anyone for voting however they want.  But when someone says they own a stock for "entertainment" purposes, I can't help but think of that as poor stewardship.

 

NBL, I would hope you would include BH's investment in Air T and Insignia as "poor stewardship" as well.  While not "entertainment", both investments were a spectacular waste of capital simply to measure penises.  Cheers!

[Hielko]

Those were excellent investments :)  Cheers!

You're serious?

[innerscorecard]

It's good to have some people against Biglari so the board doesn't become an echo chamber.

Disagreement should be encouraged.

 

I wonder whether the generalized version of this statement (companies should have boards that are contrarian to management) is actually true, especially in the case of owner-operator companies like Biglari Holdings. I think that at least for Sardar Biglari's vision of the company, the board seems to represent something like a source of collective wisdom, as well as the nexus of a network of people in the industries he mainly swims in. It seems that a board composed of people that are against Biglari is actually very much contrary to the idea of a dynamic investment holding company that makes idiosyncratic decisions based on the decisions of a clever individual brain. Whether or not Biglari's vision for the company (his stated vision - putting aside for now the possible ulterior motive of simply looting the company, which because I cannot read his mind I can't 100% rule out) is good or not is another thing, but I do think it might not make the most sense to use traditional theories of corporate governance to look at it.

[gfp]

owner operator?  It's bad enough that Sardar constantly throws around words like founder, founded, entrepreneurial, etc - but I think it is important to remember that he hasn't founded any of the companies and is a paid manager, not a founder or owner operator.  There is a big difference.  It is important to remember who's capital it is.  It is not Sardar's capital.

 

Why is it in shareholders' best interest to pay hedge fund fees on treasury shares just so Sardar can vote them?  At the very least, there should be no fees paid on company stock owned by the company.  Even the investors on this board who justify this voting arrangement because they want him to have control should be able to agree that it makes no sense to pay him incentive fees on BH shares owned by BH.  It is one of the most egregious corporate governance lapses I've ever seen - and I've been to China...

 

 

[innerscorecard]

You were absolutely right to correct my use of that term. I shouldn't have used the term owner-operator, as Biglari neither founded, owns the majority of nor actually controls Biglari Holdings (which is why shareholders are having this vote).

 

The corporate governance absolutely does not seem intended to protect or maximize shareholders' interests. But I think one of the reasons the argument over Biglari Holdings on this board is so bitterly divisive is because it seems two viewpoints (summarized roughly and without too much nuance below) are especially good at talking past each other:

 

1.  Some people seem to evaluate Biglari based on his own stated goals of creating something like an owner-operator investment holding company that has idiosyncratic corporate governance and shouldn't be evaluated on the usual standards. Thus, Biglari's treatment of shareholders is not a determinative issue, when compared to the fact that Biglari seems to be along the path of accomplishment that he wanted to do when he began his tenure at the company;

 

2. Others seem to evaluate Biglari based on common-sense heuristics of how a company should be run so that shareholders aren't taken advantage of. So the extremely high and arbitrarily shifting terms of engagement for Sardar Biglari are obviously rapacious, and mean that being a shareholder is a sucker's bet. Even if Biglari is creating value in a talented way for himself, it doesn't matter for shareholders, because he will have take it for himself in a variety of crafty and obviously unfair ways.

 

In the uncertainty of the present, both views can co-exist given the same set of facts known outside the mind of Sardar Biglari, but in the long run, they obviously are mutually contradictory ways of analyzing the company. Only one will be shown to be correct in hindsight, based on how this story plays out, and how shareholders end up doing. Interestingly, I actually think one does not have to necessarily believe in the first viewpoint for Biglari Holdings to be a rational investment, based on the price paid based on one's appraisal of the company's value as separated as it could possibly be from judgments of Biglari's character (which, shown by the discussion here, is in fact not easy to do).

[gfp]

"Interestingly, I actually think one does not have to necessarily believe in the first viewpoint for Biglari Holdings to be a rational investment, based on the price paid based on one's appraisal of the company's value as separated as it could possibly be from judgments of Biglari's character (which, shown by the discussion here, is in fact not easy to do)."

 

This is a good point, and is why I have become a shareholder again despite my criticisms.  The recent prices were far too low in a tough environment to find cheap and easy to value companies.  I bought a lot.  I also recently voted for the incumbents.  I was a shareholder of predecessor companies years ago.

 

I will continue to buy at 415 (which is also the top of the Lion Fund's repurchase range) if it trades there again.  I don't expect to lose money at these prices unless Groveland wins.  I don't think they will or I would not own the stock.

[tombgrt]

owner operator?  It's bad enough that Sardar constantly throws around words like founder, founded, entrepreneurial, etc - but I think it is important to remember that he hasn't founded any of the companies and is a paid manager, not a founder or owner operator.  There is a big difference. It is important to remember who's capital it is. It is not Sardar's capital.

 

Hey hey, give it some time! It sure will be eventually!  ;D

 

 

Someone should calculate Biglari's CAGR including compensation, theft fees, etc. and make a nice comparison against what shareholders are getting.

 

 

Why is it in shareholders' best interest to pay hedge fund fees on treasury shares just so Sardar can vote them?  At the very least, there should be no fees paid on company stock owned by the company.  Even the investors on this board who justify this voting arrangement because they want him to have control should be able to agree that it makes no sense to pay him incentive fees on BH shares owned by BH.  It is one of the most egregious corporate governance lapses I've ever seen - and I've been to China...

 

The very fact that we are on a board called "Corner of Berkshire and Fairfax" (and know what those companies stand for) and that we are discussing these obvious malpractices as if they could ever be acceptable is baffling to me!

 

 

[Parsad]

owner operator?  It's bad enough that Sardar constantly throws around words like founder, founded, entrepreneurial, etc - but I think it is important to remember that he hasn't founded any of the companies and is a paid manager, not a founder or owner operator.  There is a big difference.  It is important to remember who's capital it is.  It is not Sardar's capital.

 

Why is it in shareholders' best interest to pay hedge fund fees on treasury shares just so Sardar can vote them?  At the very least, there should be no fees paid on company stock owned by the company.  Even the investors on this board who justify this voting arrangement because they want him to have control should be able to agree that it makes no sense to pay him incentive fees on BH shares owned by BH.  It is one of the most egregious corporate governance lapses I've ever seen - and I've been to China...

 

+1!  It's amazing how obvious the dilemma is, yet very few find it ethically compromised. 

 

He's simply double-dipping.  He should have a moderate salary at BH, with a reasonable annual bonus decided by the compensation committee and approved by the board.  Then he's welcome to reap his incentive fee at Lion Fund.

 

He also should not be allowed to vote BH shares controlled by BH assets in the Lion Fund...those shares should simply abstain.  He can vote BH shares owned by the Lion Fund that are not BH assets.

 

Cheers!