LOCO has 400 locations and a market capitalization of $666M.
Biglari Holdings has 761 locations (includes 1/4 of CBRL stores since BH owns 20% of CBRL) for market cap of merely $743M.
Don't try telling me that BH has debt because Maxim magazine and the Florida direct trucker insurance, and 10% of UNAM, are worth more than the debt.
LOCO has $288 M in debt.
Buying more stock as the rights allow lets you maintain your same share of the company but at higher cost to you. This has the same effect as dilution, that is less value per shareholder dollar. That is why I said it dilutes.
It doesn't dilute anyone who buys more. And if you don't, you can sell your right and get something out of it.
Last time I even got 1 overallotment share. So someone else did nothing and I benefited.
Anyone who exercises is not diluted. Except to the extent they don't have a lot evenly divisible by 5.
Rights offerings are the most fair way to raise capital.
A below market secondary or private placement would be much more costly and dilutive to current holders.
Still, I don't see the need for a yearly rights offering.
The rights issuance dilutes current stockholders by 10% to 20%. This means book value, earnings, and revenue per share all decrease by 10% to 20%. This dilution occurs whether or not you exercise the rights.
If shareholders want additional shares, they can buy more. If shareholders want fewer shares, they can sell. Greedy Biglari continually restructures, has rights offerings, sells his private companies to BH, etc. all with the result that Biglari comes out ahead...........at shareholders' expense. He is the polar opposite of his hers Warren Buffet.
I wanted to give you a thumbs up but for some reason it showed a message 'failed to rate'. Maybe for the expansion in the Middle East? Or might they be franchises.
Because ALL shareholders have equal rights. Everyone can buy more. And those that don't can sell their rights and get something for them anyway.
My problem is not with the fairness of rights offerings. My question is how come he cant live with the very large amount of capital & cash flow he currently has ?
Why does he need more, apparently EVERY year ?
Its fundamentally fair to everyone equally but when is enough ? Is he going to raise money every year forever with below market rights offerings ?
What if he starts doing them every 6 months ?
How much is enough ?
That person is harmless. Has no money, obese and sits on the couch all day. Just another person who has no investment skills and is flat broke. I laugh at that person all the time. By the way - load up on BH here. it is the start of its run. SNS doing very well this summer.
Sentiment: Strong Buy
You are a total and complete fool. You are such a loser you have to mimic other peoples ID because you have no self esteem. You talk big but offer nothing but a person who with little or brain. One thing for sure - you will be poor the rest of your life and you deserve it. I have to add a few more shares to my position just to get the offering at such an attractive discount. I was going to hold onto my CMG but I think now is a good time to cash out. Everywhere you follow me - same story - you lose and I win. LOL
Sentiment: Strong Buy
I have no problem with this offering. It gives those of us that believe in Biglari a chance to pick up more shares at a good price. I'm certain that long-term this will pay off very nicely for us.
Come visit my office at BH headquarters. We have a photo of Mr. Biglari in the lobby that you were not able to enter. Barackhas been there to visit Sardar and some Maxxim models.