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Activist shareholder Sardar Biglari's letter to Steak n Shake Co. shareholders has whipped shares of the restaurant chain into a frothy upward frenzy. The chairman and chief executive officer of hedge fund the Lion Fund LP sent a letter to the company's shareholders on Jan. 23 calling for the replacement of the majority of the company's board of directors and the ouster of its chairman and interim CEO Alan Gilman. Shares climbed roughly 7.5% from its Jan. 22 close to hover around $8.20 in early morning trading Monday.
Biglari, who owns a roughly 8.5% stake in the restaurant chain, stated in the letter that he and Philip Cooley, vice chairman of restaurant operator and franchiser Western Sizzlin Corp., of which Biglari is CEO, hope to obtain two board seats at Steak n Shake's next annual meeting in early March and intend to call a special meeting to vote on the replacement of the majority of the board and ultimately replace the CEO. Steak n Shake's recent capital spending moves have increased overall sales, yet have failed to produce the "level of profit to justify the investment," the letter stated. It added that Steak n Shake's cumulative cash flows over the past 10 years have been negative. Biglari's plan to improve Steak n Shake's bottom line entails improvement of existing stores and expansion via franchising, contrasting the chain's focus on opening new company-operated restaurants. His plans also call for the establishment of a share repurchase program and an executive pay-for-performance initiative. - Michael Rudnick See Schedule 13D filing from the SEC Edgar CategoriesComments
From: jeff,
biglari needs a stock double just to break even in sns.
Posted on:
January 28, 2008 3:24 PM
From: andy,
www.jeffeats.com has an article on SNS and why its stock maybe a very good.
Posted on:
February 12, 2008 6:06 PM
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NoiseFreeInvesting has written some detailed and thoughtful articles on SNS and Western Sizzlin.