Every reporting insider exercised their rights.
One glaring exception is Sardar himself. It appears he did not.
So he gets a $10 million bonus and buys $3 in shares but then doesnt exercise his rights at $265 ??
Bothersome if he isnt willing to buy at a 38% discount to market.
Hopefully he did and they just forgot to file it or something.
Clueless idiot who doesnt have any conviction either way. He just posts for clicks.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours
Not sure what you are talking about. But Im 99% sure a 10% holder is sipposed to file form 4s for any buys or sells just like an officer or director.
Corporate insiders – meaning a company's officers and directors, and any beneficial owners of more than ten percent of a class of the company's equity securities registered under Section 12 of the Securities Exchange Act of 1934 – must file with the SEC a statement of ownership regarding those securities. On August 27, 2002, the SEC adopted rules and amendments to Section 16 of the Exchange Act, implementing the provisions of the Sarbanes-Oxley Act of 2002 that accelerated the deadline for filing most insider ownership reports.
The initial filing is on Form 3. An insider of an issuer that is registering equity securities for the first time under Section 12 of the Exchange Act must file this Form no later than the effective date of the registration statement. If the issuer is already registered under Section 12, the insider must file a Form 3 within ten days of becoming an officer, director, or beneficial owner.
Changes in ownership are reported on Form 4 and must be reported to the SEC within two business days. You can find the limited categories of transactions not subject to the two-day reporting requirement in the new rule.
Insiders must file a Form 5 to report any transactions that should have been reported earlier on a Form 4 or were eligible for deferred reporting. If a Form must be filed, it is due 45 days after the end of the company's fiscal year
Its for investment purposes. That was never in question.
Between the $75 million fron the rights offering and whatever he gets from CBRL he could buy something bigger than UNAM.
But, I was under the impression he had an insurance guy on the payroll or in mind or something.
But, yeah, he did the same thing before he got control of SNS, complained about their rubber stamp board and suggested a buyback. But when he got control, he also had a rubber stamp board and also didnt do a buyback even when the stock was cheap.
Do as he says, not as he does !
The wording below suggests a high degree of confidence and a long term perspective.
I dont think they are going to give up in 3-6 months and sell out if short term expectations are not met.
LTF posted yesterday as if the story will be told within 3-6 months. Thats asinine.
It took Mason a decade or so to muck this company up. The new team cant fix it overnight.
Whats impressive however is that primecap was not willing to slowly build up a position over time. Because they fear that missing out is a bigger risk than a point or two.
The firm looks for stocks where it believes the underlying company's long-term fundamentals will evolve significantly better than the current Wall Street consensus or valuation suggests. This can be a function of greater expectations it has for new products, new markets, new management, restructuring, a structural shift in demand or supply, or other changes in industry dynamics. The firm's research involves interacting directly with the companies it is reviewing as well as their competitors, suppliers, and customers.
Second, PRIMECAP Management Company takes a long-term perspective. The firm looks for stocks that it believes will outperform the market over a three- to five-year time horizon. Portfolio managers strive to recognize values early and patiently wait for the market to reach a similar conclusion. Often, the search begins with companies and industries that are currently out of favor among investors. Consequently, PRIMECAP Management Company's investment ideas are frequently early. However, if the firm believes that the long-term thesis is intact, conviction derived through its research efforts gives portfolio managers the fortitude to stay the course when the near-term fundamentals are challenging.
I really don't see the point of this whole proposal. Sure, he might get 30% to agree and get 50.01% to say pay us $20 per share. But its non-binding and it wont get him a board seat. They can blow it off or delay it for months. And Im not sure its really going to add value. But it would give him 20% off his stake back in cash and lower his cost basis on the rest.
I wonder if his goal isn't to get them to agree to a smaller dividend and give Cooley a board seat.
Because theres no way he is going to get enough votes for a board seat unless CBRL stumbles badly versus the market for a couple of years. And if we think that's going to happen, we probably shouldn't own BH !
Im surprised they haven't already offered Cooley a seat in exchange for a several year standstill for Biglari.
My best case scenario is CBRL improvements continue and someone makes an offer they cant turn down.
And with all their owned real estate, its reasonably possible.
I do own small bits of a number of different stocks. Kind of the opposite of Biglari in that regard.
I guess I lack confidence to take large bets. Im right more than Im wrong but my larger positions don't always outperform my smaller ones.
I just happen to buy into WEST about a month before Biglari took over. Then after he got control of SNS, I bought & bought & bought again at favorable prices. (It kept going down)
In hindsite, should have sold out & bought CBRL when he was loading up around $40.
I cant blame the lack of the paper document, It did come later than it should have but I knew of and had seen the sec filing. Just didn't spend a lot of time on it.
I still own a bit of OPTI. They went dark, Sal is still buying. The games over but they wont tell us anything as to if & when they will send us our money. Or how much it will be. Balance sheet shows little to no value & large taxes owed that presumably they don't really owe. Or something.
So Sal isn't any better than the old guys as far as keeping us informed.
I wasnt really THAT late. I called an hour before the market opened monday.
I think I will be ok.
Do you know how they are going to handle oversubscriptions for small holders ?
If we are too small, we just dont get any ?
I hold 20 in my IRA. Which entitles me to 4 discounted shares. But I dont think there will be 25% available for oversubscription so Im not expecting any even though I sent money in for 4 extra.
Hopefully in my other account with 39 shares, =8 rights, I might get 1 oversubscription share.
Do you have any insight there ?
His time frame is the LONG TERM.
We wont know for 5-10 years how well it will turn out.
BH isnt going to end anymore than Bershire is going to end when Warren passes.
And you really think a $70 million mutual fund that owns 17% is going to sit on their hands & watch it fall to $10-11 ?
I grant you that a lot of future results are baked into the share price but I think these guys will get us where we want to go.
No, its not Michaels but take any Goden Correl General Manager and he can run a Ruby Tuesday. The skills transfer.
We are the lead investor in Cracker Barrel Old Country Store, Inc. Our ownership, through related entities, approximates 20% of the Company, valued in the market at about $500 million. No other shareholder, board member, or officer comes close to matching our ownership. Incontrovertibly, our incentive for value creation exceeds that of the collective Board.
After reading your press release the other day, I found it obvious that when you can’t make solid arguments for rejecting us as board members, you resort to making up arguments. For instance, you state the Board voted against nominating us for election as directors because of our “backgrounds and qualifications; uncertainty over Mr. Biglari's ultimate agenda; and continued business and legal concerns over conflicts of interest.” While you make vague, ambiguous charges and personal attacks, we shall continue to present hard facts.
We have one and only one agenda: to make money. In doing so, our moneymaking would be in direct proportion to that of all other Cracker Barrel stockholders who invest for the same period as we do. So far, we have made about a quarter of a billion dollars in our Cracker Barrel position. We find it undeniable that Cracker Barrel’s stock appreciation generally resulted from our purchasing 20% of the Company in the open market. We have pushed the Board and management, inter alia, to return more capital to shareholders along with pursuing value-enhancing initiatives, e.g., licensing. But that’s not enough; we want more. If we were confident in the Board’s ability to foster sustainable, long-term value, we would simply sit back and enjoy more gains. But it is quite clear that you need our help. Cracker Barrel is an A+ brand that, in our view, has not achieved an A+ performance because the Board lacks entrepreneurial talent. It also lacks board members who have placed a significant part of their net worth in the Company’s stock.
Our involvement as the largest owner of the Company has been quite gainful for all shareholders. Cracker Barrel was undervalued and performing poorly before we appeared on the scene. Shortly after we demanded his ouster, Chairman and CEO Michael Woodhouse exited. Current management’s performance appears reasonable in comparison to Woodhouse’s dismal record. However, management’s performance remains far from stellar. (At the tepid rate of growth in customer traffic in fiscal 2013, it will take about 30 years to recover the customers lost from 2005 through 2012.) There are a number of initiatives — strategic, operational, and financial — the Company should pursue to engender more shareholder value. In this letter, we will present one idea, centered on capital allocation.
Cracker Barrel generates more cash than it consumes. We advise against using surplus cash for the following options:
Open new stores. The idea of plowing money at a low return on invested capital is asinine. Incidentally, management should fully disclose the historical performance of its new stores so all shareholders can evaluate the sagacity of reinvestment. We believe the limited factual material submitted by the Company on new-store investments puts forward data that once all expenses are factored in, new-store investments have achieved a return below the Company’s cost of capital. Fortunately, a significant slowdown has occurred in new store openings.
Accumulate cash. The idea of stockpiling cash when interest rates are nearly zero is also asinine. A return below cost of capital is obviously value destructive.
Debt repayment. Paying down debt when the financing environment is favorable is also asinine. Every dollar that reduces debt is achieving an after-tax return of less than 3%. The Company should lever up judiciously in order to take advantage of low interest rates, not delever when it holds over a billion dollars in real estate value.
The choices above — bad capex, cash accumulation (in a climate of nearly zero interest rates), or paying down debt (i.e., a suboptimal capital structure) — are all wretched strategic capital allocation alternatives. Over the past several months, we have discussed with you a proposal to return substantial cash to all owners by adjusting the capital structure in a manner that can build value for all. We have patiently and privately sought to reach a meeting of the minds, but you have been paying us mere lip service. Instead you issue a press release chock full of makeshift malarkey. As evidence, you cite that the Company has returned “approximately $18.5 million in cash through share repurchases during the past two fiscal years (through fiscal Q3 2013).” How could these repurchases be shareholder friendly when you turn around and issue more shares through stock options and grants as compensation to the Board and to management. Share count as reported for Q3 2011 was 22,975,567, and it was 23,785,827 for Q3 2013. Thus, shareholders have been diluted by the issuance of a net 810,260 shares. In other words, these additional shares have been issued to the Board and to employees with a current value of a whopping $85 million; yet you spin your verbiage as “returning cash to shareholders.” The reality is that value was transferred from shareholders not to them. Therefore, don’t do us owners any more favors by issuing stock options and grants at one price and then turning around and buying them back at an even higher price. Selling low and buying high is unwise; touting it as wise is mere idiocy.
We have an alternate plan: Because of Cracker Barrel’s current debt and debt capacity, we believe that the Board should declare a $20 per share special dividend. As of May 3, 2013, Cracker Barrel had amassed $58.5 million of cash and cash equivalents. Long-term debt stood at $400 million, down from $525 million at the beginning of the Company’s fiscal year. (The debt stood at over $900 million several years ago.) Moreover, as already noted, Cracker Barrel continues to generate cash in excess of what is required to maintain its business. We believe additional debt to fund the dividend would continue to leave the Company with a margin of safety given Cracker Barrel’s powerful collection of real estate assets and earnings power. In fact, you have effectively indicated publicly that the Board is comfortable in adding debt to the Company’s balance sheet with a proposal to purchase our shares. If you can buy our shares, you certainly have the money to issue a special dividend to all shareholders.*
In our view, Cracker Barrel is presently capitalized overconservatively. After incurring additional indebtedness to finance the proposed special dividend, Cracker Barrel would have a capital structure more appropriate to its business. Net debt would be around $800 million for a real estate, restaurant, and retail company with over $1 billion worth of real estate. Moreover, the cash flow coverage, in our view, would be more in line with that of its peer group.
Surely if Cracker Barrel’s current credit facility would permit a buyback of our shares, then a similar accommodation by Cracker Barrel’s lender could be created for the benefit of all shareholders. We think shareholders would welcome an ample return of their capital. And we hold a firm view that the shares of the Company will not fall by a corresponding $20 per share as a result of the dividend. We therefore believe that the alteration of the capital structure will be accretive to shareholder value.
Because of the Board’s stonewalling of our ideas, we are going to take the matter to other shareholders in order to reduce capital allocation risk. We will not wait while the Board continues to dillydally with our shareholder plan. Our next step is to call a special meeting of Cracker Barrel’s shareholders, which will give all owners the opportunity to vote on the special dividend. As you know, 20% of the ownership has the ability to demand a special meeting. As the lead investor in the Company, we plan to lead shareholders to more wealth creation.
We have been long term investors in Cracker Barrel. Resultantly, you would be best served to place us on the Board and forego all the time, energy, and shareholders’ money to fight us. The Board ought to reach a practical resolution to seat us on the board. So long as we are significant stockholders and we believe there is room for fundamental improvement, we will pursue board seats. The idea that a 20% stockholder cannot get a minority position on the board is nonsensical. Nevertheless, while we will continue seeking only two board seats out of nine, we will also employ the corporate machinery to put to a vote a special dividend at a special meeting. Time is ripe to pay shareholders a $20 per share special dividend. You have no valid counterargument to deny us owners a significant dividend.
Rest assured: We are determined to remain relentless in our pursuit of additional value creation.
Jonathan Maze @jonathanmaze 12m
Big wants Cracker Barrel to hold a special meeting, pay $20 dividend.
They will soon have $75 million from a rights offering that ended monday.
If I recall, he has a 9.5% position from Nov 2012.
UNAMs current marketcap is $62 million. So the $75 million should be sufficient to offer a premium for the 90.5% he does not own.
BHs adjusted average cost for UNAM is $10.855. Thats adjusting for the $1 dividend paid 11/28/12.
Cant imagine he could buy it for book value but maybe $14.50-15 ?
Total Cash Per Share (mrq): 17.73
Book Value Per Share (mrq): 13.21