Author Topic: BH - Biglari Holdings  (Read 1175032 times)

pcm983

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Re: BH - Biglari Holdings
« Reply #2660 on: August 18, 2018, 06:23:20 PM »
Interesting thanks a lot for the thoughts, really appreciate it.


Foreign Tuffett

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Re: BH - Biglari Holdings
« Reply #2661 on: October 18, 2018, 02:41:34 PM »
The $BH selloff has continued more-or-less unabated. Any thoughts on what Mr Big might do next? My take:

1) He wants to use the Class B shares as currency for acquisitions. Right now that would be self-defeating, as the extremely low valuation the company currently trades at means that nearly any transaction would be value destroying -- which would likely put further pressure on the share price.

2) Mr Big seems to really like getting fat annual bonuses, but the Lion Funds own so much $BH stock that, in an odd and circular way, these are largely dependent on the performance of $BH stock.

This makes me think that Mr Big, breaking with tradition, may actually do something shareholder-friendly in the short to medium term. This (IIRC) relates back to a point Picasso made on this board about shareholder-unfriendly managements sometimes having their incentives aligned with outside shareholders.

Of course, I could be wrong, and there are some other possibilities:

1) Mr Big can be very patient. He may wait for Steak n Shake's performance to (hopefully) improve before he makes any moves. This could be years away.

2) We've seen that Biglari is willing to bend corporate law nearly to the breaking point to benefit himself. He may be planning to slowly accumulate Class A shares over time, so that he can eventually squeeze out minority shareholders. $BH is incorporated in Indiana; I'm unsure if this would be feasible under Indiana law.

3) He could ask the board to (yet again) alter or increase his comp, basically giving "the finger" to outside shareholders yet again

 

Txvestor

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Re: BH - Biglari Holdings
« Reply #2662 on: October 18, 2018, 08:31:32 PM »
Foreign Tuffett,

With all due respect to the thought you have put into the various
actions Mr Bigs might take.
Guessing what a man will do is a fools errand. For this reason alone
this stock is uninvestable for me. All I can say is that showing is something
Mr Biglari is exceptionally gifted with. In fact he has that down to a fine
artform. And the current lot of shareholders are the perfect group for him.