Author Topic: BH - Biglari Holdings  (Read 1314912 times)

NBL0303

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Re: BH - Biglari Holdings
« Reply #2790 on: May 13, 2019, 07:18:07 AM »
This is an excellent article someone just pointed out to me, summarizing the current state of play of Steak n Shake.

https://www.ibj.com/articles/73722-a-hard-to-digest-reality-steak-n-shake-might-not-make-it



Txvestor

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Re: BH - Biglari Holdings
« Reply #2791 on: May 13, 2019, 08:13:02 AM »
To me that is a high likelihood event ie. SnS bankruptcy. He effectively was hinting at that possibility when boasting about not having the debt at the holdco level. He saddled it with debt to insure against that possibility and duped bondholders. Id frankly be very worried if I was a SnS bondholder. He also has no other intent than to live his exorbitant lifestyle courtesy his shareholders and pay himself grotesquely(he is being generous to you all remember). If shareholders make money past that hurdle so be it(he may even be deluding himself that they could). But frankly as long as the first 2 criteria are met, the hell with the rest of it.
I am stunned that his board is not considering their legal risk here and I am not sure how he is getting away. I think one reason however is complicit shareholders.

DTEJD1997

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Re: BH - Biglari Holdings
« Reply #2792 on: May 13, 2019, 08:58:26 AM »
Hey all:

It is hard for me to see how S&S does NOT go into bankruptcy.

The unit that I go to is now closed.

Perhaps even more importantly than the closures is the profitability problem.

Their food is indeed good.  Definitely better than McDonalds and BK.  Probably even better than Wendy's? 
I would think that they've got to pay for that quality.  How in the world can they possibly make money on $4 meals?  You get sandwich, fries, drink & side for the $4.  There is nothing left to upsell!  I've got a full meal for $4!  Can they sell 1,000 of those meals a day, every day?  I doubt it.  They've also got labor costs, occupancy, advertising, and on and on.

I think this thing ends in BK.

NBL0303

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Re: BH - Biglari Holdings
« Reply #2793 on: May 13, 2019, 09:35:46 AM »

I think this thing ends in BK.

I think everyone I've spoken with about this that follows this thinks that is the case. I think it is almost unanimous that Steak n Shake is essentially already in operating bankruptcy. The title of this article says it all really - when Steak n Shake's hometown paper leads with this headline - then you know it is going down.

https://www.ibj.com/articles/73722-a-hard-to-digest-reality-steak-n-shake-might-not-make-it

Hielko

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Re: BH - Biglari Holdings
« Reply #2794 on: May 13, 2019, 12:50:57 PM »
Quote
Today, Biglari, 41, a cocksure executive who scoffs at conventional corporate governance practices
Had to laugh at that one :D

wescobrk

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Re: BH - Biglari Holdings
« Reply #2795 on: May 13, 2019, 04:56:54 PM »
Wouldn't a bankruptcy be beneficial for BH shareholders? That eliminates all the interest expense for cash to upstream to the parent. BH isn't responsible for the debt. Assuming SNS can shrink and become profitable by 2021, how is that a bad scenario?

given2invest

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Re: BH - Biglari Holdings
« Reply #2796 on: May 13, 2019, 05:08:41 PM »
It's not.  But you're missing the bigger picture:  A BH shareholder is screwed indefinitely by Biglari.  It doesn't matter what NAV is now or in the future.  He is in control and will milk this for all he can to benefit himself.  Can't buy this at any price.

Parsad

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Re: BH - Biglari Holdings
« Reply #2797 on: May 13, 2019, 06:16:37 PM »
Very sad!  What a great franchise and I can't believe they shuttered 60 locations...in Indianapolis, their core market!  It was running so well several years ago, when they had streamlined the menu, brought in a nominal offering of the $4 deals and franchisees were happy.  Then he took out so much debt, did everything to increase volume (but not profitability) and pissed off the franchisees.  Really sad...I loved this business!  Plundered it and killed what was a pure cash cow!  I hope he turns it around for the sake of the franchisees, employees and people who love SNS.  Cheers!
No man is a failure who has friends!

Txvestor

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Re: BH - Biglari Holdings
« Reply #2798 on: May 13, 2019, 08:33:36 PM »
The fact that some people think this is undervalued is what is ridiculous. This is uninvestable at almost any price due to SB.
Those who were betting on the jockey, are looking pretty silly right now. Divine intervention that checks him out of this world will be a great value add right now, the odds of that are low at age 41. Value destruction and corporate malfeasance will continue apace, and shareholders will continue to be treated with contempt. I can't see anyone in their right mind, either accept BH shares in an acquistion or sell their lifes work to this guy. He can't even succeed as an activist since noone will trust him, how can anyone endorse him in a proxy battle ever again? So he is resorting to big ideas like Biglari Cafe, Milkshake machines, and cherry eliminations.
So he has rendered himself pretty useless. In many ways he is the anti-Buffett.
« Last Edit: May 14, 2019, 03:54:31 AM by Txvestor »

sarganaga

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Re: BH - Biglari Holdings
« Reply #2799 on: May 13, 2019, 11:55:04 PM »
The fact that some people think this is undervalued is what is ridiculous. This is uninvestable at almost any price due to SB.
Those who were betting on the jockey, are looking pretty silly right now. Divine intervention that checks him out of this world will be a great value add right  now, the odds of that are low at age 41. Value destruction and corporate malfeasance will continue apace, and shareholders will continue to be treated with contempt. I can't see anyone in their right mind, either accept BH shares in an acquistion or sell their lifes work to this guy. He can't even succeed as an activist since noone will trust him, how can anyone endorse him in a proxy battle ever again? So he is resorting to big ideas like Biglari Cafe, Milkshake machines, and cherry eliminations.
So he has rendered himself pretty useless. In many ways he is the anti-Buffett.

I couldn't agree more. The fact that this can be done to public company shareholders illustrates how inadequate protection is for minority shareholders. The little bastard spouted Buffet, got lucky in the short run, has demonstrated how inadequate his operational abilities actually are, & continues to be able to continue to fleece shareholders.