SB is exploiting his position of power. In my opinion, if Gabelli doesn't challenge him then my view of Mario is going down fast. SB's behavior is egregious. I think Swenson will win next year if SB continues on his path.
In the last 3 years, the S&P is up over 60%. BH is down 5%.
Question: How much compensation has Sadar been paid over those 3 years?
How are you guys feeling now? Feeling Burned yet by SB? Still think he's thinking about shareholders?
He used a lot of money to fend off the proxy fight. The most wasted of which is the BH stock buybacks that seemed to push the stock up. A close second is aggressively buying about $5 - $10 million of stocks owned by Groveland. I doubt Sadar would have done that with his own money. But he had no problem doing it with shareholder money. Was that a decision made by someone who is a master of capital allocation?
The stock was trading around $360 last year when a buyer began buying in size and didn't appear to be concerned about price. It seemed like that buyer was trying to push the price up.
That was leading up to the vote and annual meeting.
That large buyer has disappeared once the stock price was pushed up and the Presentations for the annual meeting were completed.
Now the stock is moving back to levels prior to the annual meeting.
Guess who was doing that aggressive buying? Bonus questions: guess who's money was being used to fund the purchases? Guess how that money used was raised and at what price?
Final question: guess that buyer's a Agenda for doing that aggressive buying
They've made some major strategic mistakes and I think it's back to the drawing board for them. The sports idea made sense- large market and very fragmented. They thought they could consolidate. The problem is that it is fragmented because it's hard to create a sustainable competitive advantage. I doubt they can create a scalable platform there. Energy efforts were fine and doing very well until oil crashed. The oil companies have a conservative level of debt and should make it through the downturn. I wonder if they will buy more energy companies on the cheap or take the company in a different direction. The company has $200 million in cash and Warren L and company are very bright people with a good track record. SXCL makes up about half of SPLP value. My bet is that they figure out how to re-position the company and buying here will work well for good longer term returns.
I think he's buying shares to keep the stock price up in advance of the annual meeting. Think about how aggressively he bought shares when it was in the upper 300's. I believe then he was getting the stock price up as he prepared his slides in response to Groveland. Another poor capital allocation decision on his part- he had BH (the company) sell shares at 250, put the money into the fund and then had the fund pay 400 using the proceeds from the 250 offering. I also would like people to look into how he used company funds to buy up shares of Swenson's controlled companies. SB wasted several million dollars of shareholder money in order to try and intimidate Swenson.
JD, I've followed BH for years. i bought into the SB story years ago and sounded much like you do today. At the time, there were people warning me that he's an ego maniac and that his actions will not match the words of his annual letters.
I've found in time, that they were correct. I was wrong to buy into the story SB had crafted to describe himself. I've sold my BH and am now following the story to see how it plays out.
I've read Smacy for years- he's one of the few yahoo id's that I recognize. I always appreciate hearing his perspective. He's thoughtful and reasoned in his opinion. Most of the these boards are taken up by blowhards who like to flame throw insults, probably out of boredom in their life. that's pretty much how i see you.
Are you following the recent changes at COSN? Dormant for a long time and Steel is transforming it now. Still early in the story.
It interesting- it's now a profitable operating company with NOL's, cash and stock in NATH.
It's cheap and worth a look if you have time.
If I still owned shares I would have done the same as you.
I'm eager to see the voting results. I would bet that SB will got the Biglari shares because he'll need to in order to win the proxy.
I agree with you. I've sold all my shares because I want no part of ownership in a company where the CEO takes such advantage of his power. He's outrageous and his greed is equally surprising.
I hope Gabelli takes him to task- he's the only person powerful enough to do so. Groveland is correct in their analysis, however, they lack the credibility and experience to take over.
I saw that SB is cashing out of his CBRL through forwards. I wonder if he's going to put those proceeds into Lion Funds in order to further entrench himself and position for outsized compensation.
SB's presentation confirms, imo, his low level of ethics and fair play. He seems to be squandering a great situation due to his greed and lack of character.
According to the press release yesterday, COSN owns 97% of API. They can now buy the remaining 3% at the same terms.
Also, they are selling their NATH.
The company is now going to be an operating company generating about $7 million in earnings. I believe EBITDA is in the range of $15 million.
It's now a profitable operating company with a lot of cash.
Seems very cheap here.
It seems like Steel and COSN played this one well by gaining commitments on the shares held by the other funds. I can't imagine anyone wanting to hold a position in API with COSN being in such a control position.
Do you have an opinion on the value of COSN assuming this goes through?
Based on my rough numbers, I put it between $3 and $4 a share.
COSN will get over $11 million cash just from the NATH special dividend announced yesterday. Seems like a lot of value here with our without the API acquisition.
I sold all my BH Friday. His antics continue to concern me. The latest is that he had BH sell stock at 250. Took those proceeds and put them in the Lion Fund. Then he has the Lion Fund use that money to buy shares at ~380. That doesn't seem to make sense to me if your primary focus is BH rather than SB or TLF. The aggressive buying also appears to be trying to drive the stock price up.
Also, he buys two large positions in companies controlled by a fund who is challenging his antics at BH- seemingly using BH funds again primarily for his benefit.
The stock is cheap so there may be more money to be made. But add these two issues on top of the other corporate governance concerns and I'm moving on.