Biglari 1 for 15 Reverse Split

[dcollon]

Biglari Holdings Inc. News Release

Tuesday, February 08, 2011 08:20:07 AM

 

 

San Antonio, TX, February 8, 2011 /PRNewswire/ -- Biglari Holdings Inc. (NYSE: BH) today announced that its Board of Directors has approved a 1-for-15 reverse stock split. The Company will issue a release to announce the effective date of the reverse stock split. No fractional shares will be issued in connection with the reverse stock split. Shareholders will receive a cash payment in lieu of fractional shares based upon the average of the high and low trading prices on the effective date.

 

The rationale prompting the decision to initiate the reverse stock split is for the Company to continue to attract long-term owners whose purpose is to prosper in concert with the Company's progress. The reverse stock split does not change the Company's intrinsic value. At the upcoming shareholders meeting, a second class of stock will be presented for the approval of the shareholders. Subject to approval of the shareholders and the New York Stock Exchange, the economic value of the class B stock would be 1/50 of the current common stock.

 

 

[biaggio]

My initial thought is that it is early for an April Fool's joke.

 

Are you serious? He did a reverse split last year? Is he going to do one every year until he reaches BRK.A price of $100,000.

 

What is he doing? Seems to be wasting time + resources on doing something that adds no value whatsoever.

[Partner24]

What is he doing? Seems to be wasting time + resources on doing something that adds no value whatsoever.

 

My 2 cents: since actual shareholders have approved his very generous compensation package, he's trying to reduce the liquidity of these shares in order to not ultimately taste his own medicine (new shareholder(s) who make some noise, get the actual board members out, fire the CEO).

[CONeal]

I guess if you can't be like WEB keep doing reverse splits till the share price matches his.

 

One more 1:15 reverse split next year and you can decide if you want to spend 100k on brk vs bh.

[Dorsia1]

With each new press release from Biglari comes further evidence of mental health issues.

[beerbaron]

I'm worried for Buffett's safety. Maybe he's going to try a "Mark David Chapman" on him.  :-\

 

 

[Dorsia1]

If he pulls out a ukulele at the next annual meeting then you may be on to something.

[cooger72]

What a complete and total clown. There is no doubt that this is purely a move to consolidate power by making the stock less liquid and by pushing out smaller shareholders, or at least disenfranchising them.  After this goes through, 300 of the pre-biglari SNS shares are what you'd need to have one share. 

 

I cannot identify a single positive in this for shareholders without the last names BigLiar or Cooley.

[Myth465]

I would guess this is more about control than ego. I would think that the A shares will have more votes than B shares and he will mainly hold A shares.

 

I would also guess that the people who think hes the next Jesus will continue to sing his praises and will come up with BS excuses as to why this makes sense.

[Parsad]

No comment!  Seems like a waste of time.  Cheers!

[bookie71]

Actually, a smart move on Biglari's part, as all partial shares will be cashed out, thus increasing Bigego's percentage by using the company's cash.  Just his way of looking out for his partners.

[Parsad]

Actually, the one comment I do want to make, which hasn't been made is that he could be doing this because they plan on issuing stock for some acquisitions.  I would imagine he's going to change or retain the voting structure of the "A" shares, while reducing the voting rights of the new class that may be used for acquisitions.  He's not going to issue more shares and dilute his own voting rights.  Cheers!

[Parsad]

Thought he said the class B shares would have no voting rights.

 

Then I have no idea why he's doing this.  Waste a thousand dollars on a press release, and several thousand (if not more) dollars on legal fees?  For what?  I'm glad the board is doing their job.  Cheers! 

[enoch01]

This is hilarious.  I wonder how he came up with 1:15.

[ragnarisapirate]

I for one, don't care a bit about this. After the compensation agreement, I held on to a single share to get an annual report and coupons in the mail- this is a way for me to get rid of my overvalued share (that I have been itching to get rid of) without having to pay $10 in commissions. :)

 

There will be a share repurchase effect with this split. I do kinda wonder if the company will eventually be traded on the pink sheets; after this split, surely there won't be many Class A shareholders left. Does anyone know if the Class B shares contribute to the 300 threshold for being a reporting company?

 

I want to add in that this is a genius way for him to solidify power over the company, especially when combined with the second class of shares. I know that it isn't pleasing to the palate of many (including me) but, we do need to give credit where it is due; Biglari ain't stupid. I will continue to watch everything the company does with great interest. However, as of right now, the price would basically need to be cut in half for me to want to buy shares. With the info that is out there right now, BH ain't cheap by any means that I can see.

[RichardGibbons]

This whole saga reminds me of that Buffett saying: "In looking for someone to hire, you look for three qualities: integrity, intelligence, and energy.  But the most important is integrity, because if they don't have that, the other two qualities, intelligence and energy, are going to kill you."

[Parsad]

Yup!  That's dead on.  Cheers!