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Biglari Holdings Inc. Message Board

  • jsteveco730 jsteveco730 Dec 12, 2012 8:46 PM Flag

    Financial report summary

    Looks aweful. I think they need to get back to the basics. Focus on expanding the SNS brand. Don't get all caught up in CRBL. It is a tough economy and the focus should be on core business efficiencies and expanding the brand. Keep it simple.

    Sentiment: Sell

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    • Hey Abcvalueabc,
      Who has time to read that eleven page morass? Jstveco730 has it right - Biglari got all caught up in the CRBL (though it really is CBRL) - what was Biglari thinking? He took $200 million of Steak n Shake cash flow and took on debt at less than 4% and Lion Fund capital and he bought another cheap restaurant. And what kind of earnings does BH have to show for it - NONE - it's Unrealized - what good is that? You can't pay taxes on unrealized gains, as Denn56k points out - earnings down and less tax paid - hey, great work Denn56k - you are a bottom-line guy. Meanwhile Biglari is getting away from those SNS roots - allocating capital instead of stirring side-by-side shakes while serving a heap of those delicious shoe-string fries.
      What's worse is that the reason earnings are down is that Biglari maxed out on his hedge-fund style compensation, around $10 million. We, the shareholders, agreed to pay him on increasing the value of the company, not on EARNINGS. What the heck? With him just allocating capital and making $200 million turn into $270 million, we ended up paying him $10 million. But you know what he has to do with 30% of that compensation - he is forced to buy BH shares on the open market and hold it for three years - HAH! - we got him by the short hairs now. So every time he takes low cost of capital and makes 35% returns, we stick it to him big time! And when he goes to the open market and buys those shares, there are Denn56k and Jstveco730 selling it to him - the two financial wizards. Schmuks like you and me, Abcvalueabc, we are buried in 10Qs and trying this fad called value investing and sitting there with Biglari holding shares of a restaurant company that has lost its way. My first lot has a cost basis of $152 - I haven't even sold it so I can pay taxes on it - What good is that??

    • Net income 2012 - $22 mil......2011 - $35 mil .with $7 mil less tax paid in 2012 than if the same tax was paid for both years. 2012 net income would have been $15, this is a better comparison..or a better way to make rosey the 2012 numbers.

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