Jump to content

BH - Biglari Holdings


accutronman

Recommended Posts

Groveland filed a letter this morning.

 

http://www.marketwatch.com/story/groveland-calls-for-improved-corporate-governance-at-biglari-holdings-2015-01-22

 

In general I like Groveland's proposals.

 

Ahahahah!!!!... Hilarious! Truly funny! Except alas that this doesn’t seem to be a joke… ;)

 

Swenson has written a letter the content of which is simply unacceptable for Biglari. Either Swenson loses, or Biglari is gone. If Biglari is gone, he will simply find another vehicle to shrewdly manage and to make grow. BH shareholders instead will remain poor. Of course, if Biglari is gone, I am gone too. 

 

Cheers,

 

Gio

 

Link to comment
Share on other sites

  • Replies 3k
  • Created
  • Last Reply

Top Posters In This Topic

first time I noticed this being disclosed

 

Ken Biglari, Sardar Biglari’s father, performs consulting services for Steak n Shake in the areas of cost management, outdoor advertising, and international franchise development.  In addition, Shawn Biglari, Sardar Biglari’s brother, is employed as a Director, Business Development for Steak n Shake.  Although each of Ken Biglari and Shawn Biglari received less than $120,000 in compensation from the Company during fiscal 2014, the Company has opted to provide the foregoing disclosure.

Link to comment
Share on other sites

first time I noticed this being disclosed

 

Ken Biglari, Sardar Biglari’s father, performs consulting services for Steak n Shake in the areas of cost management, outdoor advertising, and international franchise development.  In addition, Shawn Biglari, Sardar Biglari’s brother, is employed as a Director, Business Development for Steak n Shake.  Although each of Ken Biglari and Shawn Biglari received less than $120,000 in compensation from the Company during fiscal 2014, the Company has opted to provide the foregoing disclosure.

 

Yup, think it's the first.

 

Reading through it I really felt this was their "let's disclose everything" b/c of Groveland.  Seeing TLF performance fee was interesting and near the top where they disclose Changes to Compensation Program and Response to Shareholder Engagement. 

 

T'was enlightening....

Link to comment
Share on other sites

Groveland filed a letter this morning.

 

Well, by addressing their letter to the Board, they've saved themselves the embarrassment of addressing one to a person that is no longer employed by BH (like they did with the original letter of intent to nominate candidates to the Board).

 

Re. their note about Sardar's compensation being outsized and not being aligned to company performance, it might be useful to know how to measure performance in the first place.

Hint: Outsourcing your thinking to ISS is probably not a good idea.

 

Best,

Ragu

Link to comment
Share on other sites

Groveland filed a letter this morning.

 

Well, by addressing their letter to the Board, they've saved themselves the embarrassment of addressing one to a person that is no longer employed by BH (like they did with the original letter of intent to nominate candidates to the Board).

 

Re. their note about Sardar's compensation being outsized and not being aligned to company performance, it might be useful to know how to measure performance in the first place.

Hint: Outsourcing your thinking to ISS is probably not a good idea.

 

Best,

Ragu

 

Ragu,

 

I appreciate your thoughts, but am not sure how to interpret them.  Can you expound upon them?

Link to comment
Share on other sites

[..]

Ignore the compensation agreement changes; ignore the two classes of shares; ignore selling the hedge fund to BH and then buying it back to reap the incentive fees; ignore the licensing agreement; ignore the complaints by franchisees; ignore the comments by those that consulted and worked at SNS; ignore long-time shareholders that were there from Western Sizzlin or Lion Fund; ignore Biglari Design and SNS by Biglari crap; ignore the deteriorating performance at SNS; ignore the increasing amount of leverage at BH and its subsidiaries; ignore the stock price which is lower than when I sold it four and a half years ago; ignore all of that which has been oft-repeated to you...doesn't the retaliatory purchase of AIRT and ISIG share prices well above where they were trading concern you in the slightest?

 

Sardar was concerned with saving $600K a year by removing the red coloring on the styrofoam cups after taking over Steak'n Shake, but now you and other shareholders are perfectly fine excusing several million dollars spent needlessly on two companies where BH activists are sitting?

[..]

 

AIRT is down 30% since the retaliatory buying spree. ISIG is down 25%. I've been short AIRT since the filings, 'basically betting that Biglari is a retard' as per the tweet mentioned a few weeks ago. Both stocks are roughly back to where they were beforehand. I'll probably close out soon.

 

BH appears attractively valued but I don't want to team up with somebody who is capable of stuff like this. This was not an insightful deep value play - Sardar squandered away a couple of million in these names just to annoy somebody who bought a handful of BH shares and filed a proxy. Pathetic. I guess people have to bring their own cups to SNS in the near future to make up for the losses :) .

Link to comment
Share on other sites

[..]

Ignore the compensation agreement changes; ignore the two classes of shares; ignore selling the hedge fund to BH and then buying it back to reap the incentive fees; ignore the licensing agreement; ignore the complaints by franchisees; ignore the comments by those that consulted and worked at SNS; ignore long-time shareholders that were there from Western Sizzlin or Lion Fund; ignore Biglari Design and SNS by Biglari crap; ignore the deteriorating performance at SNS; ignore the increasing amount of leverage at BH and its subsidiaries; ignore the stock price which is lower than when I sold it four and a half years ago; ignore all of that which has been oft-repeated to you...doesn't the retaliatory purchase of AIRT and ISIG share prices well above where they were trading concern you in the slightest?

 

Sardar was concerned with saving $600K a year by removing the red coloring on the styrofoam cups after taking over Steak'n Shake, but now you and other shareholders are perfectly fine excusing several million dollars spent needlessly on two companies where BH activists are sitting?

[..]

 

AIRT is down 30% since the retaliatory buying spree. ISIG is down 25%. I've been short AIRT since the filings, 'basically betting that Biglari is a retard' as per the tweet mentioned a few weeks ago. Both stocks are roughly back to where they were beforehand. I'll probably close out soon.

 

BH appears attractively valued but I don't want to team up with somebody who is capable of stuff like this. This was not an insightful deep value play - Sardar squandered away a couple of million in these names just to annoy somebody who bought a handful of BH shares and filed a proxy. Pathetic. I guess people have to bring their own cups to SNS in the near future to make up for the losses :) .

 

Perfectly sums up my thoughts on the situation.

Link to comment
Share on other sites

Groveland filed a letter this morning.

 

http://www.marketwatch.com/story/groveland-calls-for-improved-corporate-governance-at-biglari-holdings-2015-01-22

 

In general I like Groveland's proposals.

 

Ahahahah!!!!... Hilarious! Truly funny! Except alas that this doesn’t seem to be a joke… ;)

 

Swenson has written a letter the content of which is simply unacceptable for Biglari. Either Swenson loses, or Biglari is gone. If Biglari is gone, he will simply find another vehicle to shrewdly manage and to make grow. BH shareholders instead will remain poor. Of course, if Biglari is gone, I am gone too. 

 

Cheers,

 

Gio

 

If Biglari leaves, I would think there would be a lot of people who would be happy to buy your shares. ;)

Link to comment
Share on other sites

If Biglari leaves, I would think there would be a lot of people who would be happy to buy your shares. ;)

 

Ah! Good to know that even in my worst case scenario, the one in which Biglari is forced to leave the company, I would still be able to get out with a nice gain! ;D ;D

 

Cheers,

 

Gio

 

Link to comment
Share on other sites

If Biglari leaves, I would think there would be a lot of people who would be happy to buy your shares. ;)

 

Ah! Good to know that even in my worst case scenario, the one in which Biglari is forced to leave the company, I would still be able to get out with a nice gain! ;D ;D

 

Cheers,

 

Gio

 

Gio-- apologies if this has been asked before or if it sounds sarcastic-- its not. But is there any one specific thing that Biglari has done that you don't like?

 

For example were you in favor of the dual share class structure? What about the name licensing /change in control contract?

 

 

 

Link to comment
Share on other sites

Surely Gio doesn't like that Sardar gave away approximately $1000 (could be off a factor 2 or 3) of his hard-earned money to me, assuming I was the counterparty from whom Gio was buying AIRT indirectly. I owe him a couple of drinks whenever a COBF Europe meeting will take place!

 

Jokes aside, especially if you invest in BH you shouldn't view everything through rosy glasses. I think it is quite a stretch to explain the whole '13D-gate' in a favourable way. The harm Groveland did was equivalent to a kid kicking a soccer ball against your window. Biglari bought a tank to shoot down their house in response ..

Link to comment
Share on other sites

If Biglari leaves, I would think there would be a lot of people who would be happy to buy your shares. ;)

 

Ah! Good to know that even in my worst case scenario, the one in which Biglari is forced to leave the company, I would still be able to get out with a nice gain! ;D ;D

 

Cheers,

 

Gio

 

Gio-- apologies if this has been asked before or if it sounds sarcastic-- its not. But is there any one specific thing that Biglari has done that you don't like?

 

For example were you in favor of the dual share class structure? What about the name licensing /change in control contract?

 

If I remember, Gio spoke favorably about this as a way to maintain power -- something along the lines of that being exactly what someone in Biglari's position should do.

Link to comment
Share on other sites

I think I've said this before, and at the risk of repeating myself and turning this into something akin to the Sears or Level 3 threads, I'll say it again. :)

 

I don't doubt that Biglari is a value creator and/or a very good investor. He will likely create tons of value for Biglari Holdings over the next decade or two (so long as he stays in power).

 

The question is the following -- for every dollar he creates in value for Biglari Holdings, what's the split? Is it going to be:

 

(1) $0.99 for Sardar, $0.01 for investors

(2) $0.50 for Sardar, $0.50 for investors

(3) $0.20 for Sardar, $0.80 for investors

(4) etc.

 

Clearly there is a continuum, and there is a place on the continuum nearer to (1) than to (3) where investing with Biglari will end up being a mistake regardless of how much value Biglari creates for Biglari Holdings. (Assuming some cap at 50% CAGR -- clearly if he can do 10,000% CAGR, 1% of that is still pretty darn good, but there are some built-in brakes to the compounding machine.)

 

The disagreement most people are having is likely based on the percentage chance that people are putting on the various split possibilities. Many people who say they don't want to do business w/ Biglari believe that over time, so long as Biglari is in power and has the equivalent of cronies on the board, Biglari will shift the "spoils of war," so to speak, up nearer to (1) than to (3).

 

The people who are supportive of Biglari, I am assuming, believe that over time, the split will be closer to (3) than to (1).

 

Time will tell who ends up being right.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now



×
×
  • Create New...