giofranchi Posted April 14, 2015 Share Posted April 14, 2015 I hope you enjoy and find the details useful to your analysis of BH. Thank you for sharing, frugalchief! :) Cheers, Gio Link to comment Share on other sites More sharing options...
innerscorecard Posted April 14, 2015 Share Posted April 14, 2015 FYI, another set of notes here: http://seekingalpha.com/article/3068066-biglari-holdings-2015-annual-meeting-notes-initial-statement-and-proxy-contest Link to comment Share on other sites More sharing options...
jimjam Posted April 14, 2015 Share Posted April 14, 2015 Thank for the notes about First Guard and the notes from the annual meeting. Much appreciated! Cheers Link to comment Share on other sites More sharing options...
frugalchief Posted April 14, 2015 Share Posted April 14, 2015 Frugalchief, Even as we disagree on much. Your effort and generosity in posting your meeting notes on this board is much appreciated. As was NBLs lengthy analysis earlier. It is always useful(perhaps more useful) to hear the perspective of someone with whom you disagree. Couldn't agree more. It is worthwhile to hear another value investors perspective regarding certain businesses, to see whether our own thesis or thoughts might be missing something. Link to comment Share on other sites More sharing options...
APG12 Posted April 14, 2015 Share Posted April 14, 2015 Might as well throw my notes into the mix: http://apg90.blogspot.com/2015/04/biglari-holdings-2014-annual-general.html Link to comment Share on other sites More sharing options...
frugalchief Posted April 14, 2015 Share Posted April 14, 2015 Might as well throw my notes into the mix: http://apg90.blogspot.com/2015/04/biglari-holdings-2014-annual-general.html Thanks for sharing APG! Link to comment Share on other sites More sharing options...
S2S Posted April 14, 2015 Share Posted April 14, 2015 Might as well throw my notes into the mix: http://apg90.blogspot.com/2015/04/biglari-holdings-2014-annual-general.html Excellent notes (that highlight SB's answers to many of the questions raised in this thread). Thank you! Link to comment Share on other sites More sharing options...
dcollon Posted April 14, 2015 Share Posted April 14, 2015 Thanks to all the board members that posted their notes. They are much appreciated. Link to comment Share on other sites More sharing options...
NBL0303 Posted April 15, 2015 Share Posted April 15, 2015 I would like to add my appreciation and thanks to the mix. You men and women who have contributed to this discussion are fantastic! Link to comment Share on other sites More sharing options...
innerscorecard Posted April 15, 2015 Share Posted April 15, 2015 I have no idea what Nick Swenson (it appears to actually be him, based on the user's comment history) meant by this comment: http://seekingalpha.com/article/3068066-biglari-holdings-2015-annual-meeting-notes-initial-statement-and-proxy-contest#comment-51462176 Link to comment Share on other sites More sharing options...
innerscorecard Posted April 15, 2015 Share Posted April 15, 2015 Just a curiosity, and irrelevant to the value of the company, but it looks like Sardar Biglari's top range of buying BH stock continues to be around $415: http://www.sec.gov/Archives/edgar/data/93859/000092189515000944/xslF345X01/form407428007_04142015.xml Link to comment Share on other sites More sharing options...
frugalchief Posted April 15, 2015 Share Posted April 15, 2015 Here are the voting results: http://www.sec.gov/Archives/edgar/data/93859/000092189515000950/form8k07428007_04092015.htm Link to comment Share on other sites More sharing options...
benhacker Posted April 15, 2015 Share Posted April 15, 2015 NBL, I'm somewhat baffled by how well the say-on-pay vote did. Why did so many more shares vote in approval of the Biglari compensation plan this year? (Again, the increased Lion Fund vote does not really account for a significant percentage of the increase.) I don't follow BH other than this thread, but, isn't this what you should expect? So it would seem those selling (on average) are likely those who are indeed voting with their feet (they lost the say on pay, Big hasn't changed his ways, etc), and those buying are those who are comfortable and feel they are getting a bargain. Seems that if the stagnant share price / rising price should attract more long term buyers why those who disagree with Big (Gabelli for example) will be sellers over time... thus his support should grow as long as his actions remain consistent and endorsed by his supporters. maybe if there was a huge selloff, people would change their vote on pay (and/or real activists with a big stake would step in), but there hasn't been... It's not a democracy, it's just a vote of who own shares... seems logical to me that those who own would be more supportive. (again, speaking directionally, not to say a certain improvement of the vote would be expected, just that the trend direction is what I would have expected) this year than last... folks don't generally hold company stock where they disagree with pay... as Sardar suggested. Link to comment Share on other sites More sharing options...
mcmaaaaath Posted April 16, 2015 Share Posted April 16, 2015 Vote totals are in - wasn't all that close. The really interesting thing is how senseless voters are. By this I mean, it makes complete sense to me why someone would vote for the Groveland slate - or even two of their directors. It also makes complete sense to me why someone would vote for the entire Biglari slate - as I did. But the vote totals show that a significant portion of voters (by that I mean at least a few hundred thousand shares) voted for Sardar Biglari but none of the other incumbents. This makes absolutely no sense because the Groveland slate of directors promised to immediately fire Biglari. So electing Biglari to the Board, but electing a majority of the Groveland people, would have guaranteed the biggest fight of all. I think anyone who voted for Biglari, but not the rest of the board, likely did not read the full proxy statements. Maybe some of them voted for Biglari and then withheld for the rest, but this too doesn't make sense, because this increased the chances of creating the worse situation - one in which Biglari got elected to the Board but was then immediately fired as CEO. Again, this is not a commentary on which slate of directors should have won or if Sardar Biglari is an evil genius or just evil or just a genius - my point here is Biglari-neutral. It is just about the immense lack of wisdom that it would take to vote for Sardar Biglari for the board but then either vote for, or raise the odds of, a majority slate of the Board that had promised to immediately fire Sardar Biglari. These vote totals show why value investors are still able to do really well in the market. Many many people and institutions that call themselves investors can't even do enough research to vote sensibly for a company like this. This shows how few people are doing significant research. The other surprising thing, to me, about the vote totals is how much better Biglari did on the say-on-pay vote this year. It actually got more votes approving of Biglari's compensation than disapproving of it - though that includes the Lion Fund shares - so that is not real shareholder approval. But surely the Lion Fund shares were voted in favor of the compensation last year as well and yet this year the "Approve" the compensation plan got like 400,000 more votes I think. This year many more shares voted to approve the compensation this year despite the proxy contest and the additional attention on this (or maybe because of the additional attention on it). I'm somewhat baffled by how well the say-on-pay vote did. Why did so many more shares vote in approval of the Biglari compensation plan this year? (Again, the increased Lion Fund vote does not really account for a significant percentage of the increase.) What about people who wanted to vote in 2 of Groveland's directors, and but keep Biglari in control with the other 4 board seats? This would've a) not triggered the change in control in the royalty agreement and b) given Groveland 2/4 independent board seats and allowed them to participate in the auditing and compensation committees. And more importantly, I THINK it would've allowed Groveland or someone else to get another 2 board seats in 2016 without triggering the change of control in the royalty agreement. This could be important if the other 2 people weren't Groveland and wanted to leave Biglari as CEO and capital allocator, but remove the Biglari name and stop the clock on the royalty agreement. If you were voting for 4 Biglari and 2 Groveland, you would vote for a) Sardar b) three of Biglari's nominees and c) 2 of groveland's nominees. So Sardar would get all of those people's votes, but the other members of the incumbent slate would only get 60% as many votes since people would be voting for three spots between five people. This would explain why Sardar got more votes than the other incumbents without needing total irrationality as the explanation. Link to comment Share on other sites More sharing options...
DavidVY Posted April 16, 2015 Share Posted April 16, 2015 Sold out 2 weeks ago. I still think its undervalued, but the compensation issue is a big headwind. Cultural note- dealing with Persians is very tough. Notoriously self-dealing and change agreements whenever it suits them. Thats been Sardar's MO, and its a dangerous combo. For historical examples of dealing w/Iranians, check out the history of Anglo-American Oil (BP/Gulf Oil consortium) in Iran and check out Iran's agreement with nuclear issues. Link to comment Share on other sites More sharing options...
frugalchief Posted April 17, 2015 Share Posted April 17, 2015 And....Groveland's comments to the final tally... http://www.marketwatch.com/story/groveland-group-comments-on-voting-results-from-biglari-holdings-2015-annual-meeting-of-shareholders-2015-04-17?reflink=MW_news_stmp Link to comment Share on other sites More sharing options...
mcmaaaaath Posted April 21, 2015 Share Posted April 21, 2015 I forget if I saw this in any of the notes on the meeting but one important thing he did discuss was rights offerings and whether they would be put to votes. He basically told the person that no, he would not put future rights offerings to a vote. That everyone should look up how many shares are authorized to be issued without a shareholder vote. He implied that it is likely that those shares would all get issued, and that only AFTER all those shares were issued would rights offerings need to come to a vote. While perusing the gold covered annual report over the weekend, I noticed that 2.5m shares are authorized according to the annual report. Of these, 2.142m shares have been issued. This means that by Sardar's logic, another 360k shares could be issued. At current share prices this would raise another $150m. Obviously you can assume your own rate of discount to the current market price. It also means that investors should expect to be forced to put up another 1/6 of their current investment in the stock at some point down the road in a rights offering. Of course you can always sell your rights so you are really not in that bad of shape. And actually that reminds me of a question-- did the rights offerings themselves actually trade on exchange? Or how did that work? Was there any liquidity? It also means that Biglari's ability to do these rights offerings totally unchecked is basically limited to one more go. One other thing-- the company bylaws reference 50,000,000 authorized shares. I am assuming that what is referenced in the annual report is the correct figure, and has been adjusted for the 2009 share split. But does it have to be adjusted for the split? Or is there a chance he may one day wake up and say, "actually guys the authorized share count was wrong, we can issue 50m shares. Go look at the bylaws". Section 1. Number of Shares and Classes of Capital Stock. The total number of shares of common stock which the Corporation shall have authority to issue is 50,000,000 shares, which shall consist of 50,000,000 common shares without par value. In addition, the Corporation shall have the authority to issue 10,000,000 shares of Preferred Stock on the terms and conditions set forth in the amendment to the Articles of Incorporation adopted May 16, 2001. Link to comment Share on other sites More sharing options...
frugalchief Posted April 21, 2015 Share Posted April 21, 2015 I think that's old. Original reverse split was 1-20, so 50/20 = 2.5m authorized Link to comment Share on other sites More sharing options...
DavidVY Posted April 21, 2015 Share Posted April 21, 2015 The problem with the rights offering is that it favors the "big boys" at the expense of the small shareholders. For TD-Ameritrade, exercising rights offering is $30. Thats a big % commision if you have less than 5k worth of BH shares Is it legal? yes Is it looking out for shareholder interest? not really. Its a way for BH to push out the little people and help the insiders and big investors. Crony capitalism at its best. @previous poster- the warrants were publicly traded, but the symbols kept changing. It was a PITA to keep up w/it. Maybe the right way to play it is to short the stock before the rights offering and then buy it back after shares drop 10-15% (accounting for right offerings warrant sell-offs) Link to comment Share on other sites More sharing options...
innerscorecard Posted April 22, 2015 Share Posted April 22, 2015 Not an extremely rigorous article, but it is somewhat interesting that Nick Swenson continues to comment: http://seekingalpha.com/article/3085716-biglari-holdings-2015-annual-meeting-notes-maxim-magazine-q-and-a http://seekingalpha.com/article/3085716-biglari-holdings-2015-annual-meeting-notes-maxim-magazine-q-and-a#comment-51823416 Link to comment Share on other sites More sharing options...
jschembs Posted April 22, 2015 Share Posted April 22, 2015 Not an extremely rigorous article, but it is somewhat interesting that Nick Swenson continues to comment: http://seekingalpha.com/article/3085716-biglari-holdings-2015-annual-meeting-notes-maxim-magazine-q-and-a http://seekingalpha.com/article/3085716-biglari-holdings-2015-annual-meeting-notes-maxim-magazine-q-and-a#comment-51823416 assuming that's actually nick :) Link to comment Share on other sites More sharing options...
innerscorecard Posted April 22, 2015 Share Posted April 22, 2015 It could be someone spoofing Nick, but the account's first post (http://seekingalpha.com/article/3056556-key-issues-and-tangible-solutions-for-biglari-holdings-shareholders#comment-51309206) appears more likely than not to be genuine based on the context. This is all a total sideshow to the value of Biglari Holdings the company of course, but a somewhat entertaining one. Link to comment Share on other sites More sharing options...
giofranchi Posted April 23, 2015 Share Posted April 23, 2015 BH is selling for less than BVPS. ;) Gio Link to comment Share on other sites More sharing options...
gfp Posted April 23, 2015 Share Posted April 23, 2015 Just as a general heads up I thought I would mention that the 10b5-1 purchase plan by Biglari Capital has run its course. 62,000 shares have been purchased (the amount they filed for) and the lower prices this week coincided with the end of Sardar's buying. Link to comment Share on other sites More sharing options...
giofranchi Posted April 23, 2015 Share Posted April 23, 2015 Just as a general heads up I thought I would mention that the 10b5-1 purchase plan by Biglari Capital has run its course. 62,000 shares have been purchased (the amount they filed for) and the lower prices this week coincided with the end of Sardar's buying. Well, I think also large investors like Gabelli might have sold some… Gabelli clearly wasn’t happy about the results of the AM, right? Gio Link to comment Share on other sites More sharing options...
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