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Steak N Shake Dispute


OracleofCarolina
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It's his way or the highway.  Although I agree with uniformity across the chain.  I just don't agree with driving some of your franchisees out of business.

 

I think the coupon idea is stupid.  No one has as great a promotion as "4 meals under $4" for the same quality burger, and that is the one that is really creating traffic, along with the happy hour shakes and new menu promotions like the guacamole burger, etc.  You put in 25 cents of guacamole and charge a dollar more!  Cheers!

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It won't matter.  The company is called Biglari Holdings.  He owns all of 2% personally.  Who cares about the other shareholders or franchisees!

 

I remember that Berkshire AGM where a woman got up to ask Buffett a question, and she was apologetic and said that she only owned one B share.  Buffett graciously responded "That's ok, because between the two of us, we control most of the company." 

 

Fortunately it wasn't Sardar, otherwise we would have heard "Mr. Buffett, I believe that Berkshire has too much excess capital, and I would like to forward a shareholder proposal to return some of that capital back to shareholders."  Obviously, Buffett would say no, at which point a proxy fight would ensue...Buffett would be removed, Sardar would become CEO, Cooley would replace Charlie Munger, and Berkshire Hathaway would become Biglari Holdings...because most of those owners would want to sell their business to Biglari Holdings and not some insurance company.

 

"He who thinks he can find in himself the means of doing without others is much mistaken; but he who thinks that others cannot do without him is still more mistaken." - La Rochefoucauld 

 

Cheers!

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Fortunately it wasn't Sardar, otherwise we would have heard "Mr. Buffett, I believe that Berkshire has too much excess capital, and I would like to forward a shareholder proposal to return some of that capital back to shareholders."  Obviously, Buffett would say no, at which point a proxy fight would ensue...Buffett would be removed, Sardar would become CEO, Cooley would replace Charlie Munger, and Berkshire Hathaway would become Biglari Holdings...because most of those owners would want to sell their business to Biglari Holdings and not some insurance company.

 

Ahah good one  :D

 

No wait, he would first say that he would not do it for the compensation to rally some shareholders to his cause and then, he would propose a very generous compensation scheme for himself. First aggressively, then he would retire his proposal and let some time pass to let the angry shareholders sell their shares, then be back and change the compensation scheme slightly just for the show. Then he would say that he's a demon on costs...except for his own compensation.

 

But, that's just a fictive scenario, because Berkshire has a true ownership culture, and it's shareholders would show him the exit door.

 

Cheers!

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When one looks at BH stock price, it is efficient market theory in action. Franklin famously said "Do well by doing good" - we are seeing the exact reverse in action here. The guy mixes investment income with operating income. People annualize the EPS growth (incuding investment income) and assign a multiple to it.

 

The compensation mechanism and the book value consideration for the same is anything but transparent.

 

When I see this, I get a feeling this is not going to end well. May be it is just me.  >:(

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I remember that Berkshire AGM where a woman got up to ask Buffett a question, and she was apologetic and said that she only owned one B share.  Buffett graciously responded "That's ok, because between the two of us, we control most of the company."  

 

 

I am ganna (its a word down here) miss Buffett, he had a sense of humor and charm that cant one cannot learn inmo. I also like the humility (whether false / planned or not). Its refreshing.

 

Thanks for these Gems Parsad.

 

Here is one for you - “The cemeteries of the world are full of indispensable men.”    Charles de Gaulle

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When I see this, I get a feeling this is not going to end well. May be it is just me.

 

No idea what will happen, but the best case scenario is that he creates a lot of wealth for himself and develops the type of reputation that I would not envy.  Think Icahn versus Buffett.  They both have their followers, but who would you rather be?  Who would you want your children to be like?  Beloved or villified?  Cheers! 

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I think Biglari is in a league all of his own - he has got equity to use as money for acquisitions, he squeezes shareholders, franchisees and workers to enrich himself.

 

Yet the people still love him. But I guess we are all looking for the next Buffett.

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