Author Topic: BH - Biglari Holdings  (Read 1416201 times)

bargainman

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Re: BH - Biglari Holdings
« Reply #660 on: July 26, 2014, 03:03:01 PM »
Previous price is not a reason for something to be undervalued. Right?

What I meant is this: until CBRL stock price began to slightly decline (or at least stopped appreciating fast), and until it became obvious that Biglari is facing a long battle with CBRL’s management, the P/B ratio the market was willing to accord to BH was in line with the one of other companies which are expected to grow BVPS at a handsome CAGR for many years to come.

Gio

I think that the issue here is what will big man be able to do in the future?  Given his less than sterling reputation and the ability of Target companies to put up a reasonable fight as demonstrated by Cracker Barrel, Will Bigs be able to police sorts of returns in the future?  He definitely deserves some credit in the cracker case in that he has pushed management to make or at least pretend to make changes that have increased the stock-price and presumably the value of cracker.  So perhaps it is not important that in the future he will be able to get a board seat or take control as long as he's able to move management to make changes.

I am curious if anybody is first in the history of raiders and "jerk activist investors out to make themselves rich" like perhaps Icahn would care to comment on how big Larry compares?
« Last Edit: July 26, 2014, 03:06:44 PM by bargainman »


bargainman

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Re: BH - Biglari Holdings
« Reply #661 on: July 26, 2014, 03:17:32 PM »
"When you have eliminated the impossible, whatever remains, however improbable, must be the truth." - Sherlock Holmes

As per Cooley, the vast majority of the money in the Lion Fund comes locally from San Antonio. These are folks that have known Sardar for a very long time.

It's no surprise to me that they stick with him. It's also no surprise why: Their assessment is that he is trustworthy. I agree.

Best,
Ragu

This statement is incredibly flawed.  Think about it at the extreme. The people who know you the longest are your parents. Your parents stick with you and trust you. Therefore everybody else should stick with you and trust you.

The people who have been with you the most are most likely to stick with you for many reasons other than you being trustworthy.  Just watch a few episodes of that addict rehab show "Intervention" and this will be absolutely clear.

I really hope that you are not making your investment decisions based on big Larry's initial investors sticking with him.

bargainman

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Re: BH - Biglari Holdings
« Reply #662 on: July 26, 2014, 03:23:42 PM »
One question about the rights offering. I'm pretty sure this has been discussed in the past but I can't remember the Outcome. Why is he offering shares at a price so far below the current market shareprice?

I think in the past the conclusion was that, given the over subscription clause, this will allow him to pick up shares quite cheaply and increase his control of the company (assuming some number of shareholders did not fully subscribe).

is this is everybody else's assessment?  Are most rights offerings like this? I would think that if he wanted to raise money he would be able to do it in a manner that was less dilutive and would give him more cash. It seems like an awfully large discount..

WideMoat

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Re: BH - Biglari Holdings
« Reply #663 on: July 26, 2014, 04:29:43 PM »
Why is he offering shares at a price so far below the current market shareprice? ...

Are most rights offerings like this? I would think that if he wanted to raise money he would be able to do it in a manner that was less dilutive and would give him more cash. It seems like an awfully large discount..

What if an executive was required to purchase shares with a certain percentage of his annual compensation?  Would be nice to do so at a discount, right?

"The Incentive Agreement provides that Mr. Biglari will use an amount equal to at least 30% of his annual pre-tax incentive compensation to purchase shares of BH’s common stock on the open market within 120 calendar days of his receipt of such payment, subject to restrictions under the Corporation’s insider trading policy. This requirement represents approximately 50% of his after-tax incentive  compensation. Mr. Biglari is then required to hold such shares for a minimum of three years from the date of purchase, subject to the terms of the Incentive Agreement." [http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=7480538-1192-220709&type=sect&TabIndex=2&companyid=11049&ppu=%252fdefault.aspx%253fcik%253d93859]
« Last Edit: July 26, 2014, 04:31:18 PM by WideMoat »

Myth465

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Re: BH - Biglari Holdings
« Reply #664 on: July 26, 2014, 07:04:31 PM »
I am glad I have my popcorn, this is a most entertaining show.
Will be interesting to see what great lengths Gio and Ragu go to to make this seem perfectly normal, and actually advantageous to the company and its shareholders.....

Who ever said cognitive dissonance was on to something.

Leon Festinger's theory of cognitive dissonance focuses on how humans strive for internal consistency. When inconsistency (dissonance) is experienced, individuals largely become psychologically distressed. His basic hypotheses are listed below:

Consistently inconsistent as it relates to BH - Biglari Holdings......
I still think Ragu is Mr. Biglari, he is a bit too personally attached to this idea and the perception of its CEO...
« Last Edit: July 26, 2014, 07:09:15 PM by Myth465 »

peter1234

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Re: BH - Biglari Holdings
« Reply #665 on: July 26, 2014, 07:35:51 PM »
I am glad I have my popcorn, this is a most entertaining show.
Will be interesting to see what great lengths Gio and Ragu go to to make this seem perfectly normal, and actually advantageous to the company and its shareholders.....

Who ever said cognitive dissonance was on to something.

Leon Festinger's theory of cognitive dissonance focuses on how humans strive for internal consistency. When inconsistency (dissonance) is experienced, individuals largely become psychologically distressed. His basic hypotheses are listed below:

Consistently inconsistent as it relates to BH - Biglari Holdings......
I still think Ragu is Mr. Biglari, he is a bit too personally attached to this idea and the perception of its CEO...

This just elevated it to a whole new level. Now we have conspiracies as well...

 ;D

ragu

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Re: BH - Biglari Holdings
« Reply #666 on: July 26, 2014, 09:31:02 PM »
I still think Ragu is  Sardar Mr. Biglari [...]

Get with the program. We want to keep Sanjeev happy, don't we? ;)

Best,
Ragu

QLEAP

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Re: BH - Biglari Holdings
« Reply #667 on: July 26, 2014, 10:07:46 PM »
I still think Ragu is  Sardar Mr. Biglari [...]

Get with the program. We want to keep Sanjeev happy, don't we? ;)

Best,
Ragu

LoL Myth. I hate to burst your bubble but I have met Ragu in person and he is no Sardar!

Supremely rational and outstanding investor too :=)



Myth465

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Re: BH - Biglari Holdings
« Reply #668 on: July 26, 2014, 10:51:18 PM »
I still think Ragu is  Sardar Mr. Biglari [...]

Get with the program. We want to keep Sanjeev happy, don't we? ;)

Best,
Ragu

Yes we do, yes we do  :)

I still think Ragu is  Sardar Mr. Biglari [...]

Get with the program. We want to keep Sanjeev happy, don't we? ;)

Best,
Ragu

LoL Myth. I hate to burst your bubble but I have met Ragu in person and he is no Sardar!

Supremely rational and outstanding investor too :=)

All may be true, but I have so rarely seen someone so passionate in the defense of a CEO.
Just trying to figure out why. Ultimately this will all sort itself out via SEC fillings and BH events.

This is fast becoming about as useful a thread as the one on Sears or the one on LVLT.
« Last Edit: July 26, 2014, 10:53:08 PM by Myth465 »

giofranchi

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Re: BH - Biglari Holdings
« Reply #669 on: July 27, 2014, 01:48:15 AM »
Quote
edit: oh, & if biglari continues with these rights offerings below book value its going to take some adjustments to calc bh's real growth in bvps when attempting to plot his scorecard on that metric. I thought it was interesting that he said he'll continue to make use of rights offerings at least until he's able to push thru a shareholder vote for a dual class of stock, tho I don't remember where I read that at this time

My guess is that he will continue to do rights offerings so he can get more of the company when he has the capital at a lower price. Makes perfect sense - IMO.

Well, to calculate BVPS I simply use the number of shares in the first page of the 10-K filing. Just like Biglari himself has suggested to do. That number has increased from 2010 to 2013, and, if Biglari keeps making use of these rights offerings, it will get larger and larger.

Gio
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