ITEX -- now this is interesting

[Munger]

"ITEX, sardar spoke with Steve white yesterday and told him he needs to have a shareholder vote or he would not support him in a transaction it's recently announced"

Did some work on the above post.

 

As best I can tell, the CEO of ITEX basically gave himself shares equal to app 5% of the company without subjecting the distribution to a shareholder vote.

 

Possible the CEO is very good but no excuse for stealing from shareholders.  The share distribution w/o shareholder approval is absolutely crooked.  How does this guy think he'll get away with giving himself 5% of the company without putting the transaction to a shareholder vote?

 

I have no idea if the ITEX business is sustainable but the economics are clearly outstanding and the current valuation is cheap based on trailing 12 months cash flow and adjusting for the cash on the BS.

 

BH owns a large stake in the company.  Based on his personality, tough to see Biglari backing away from this situation.  

 

As part of the work, I saw that Parsad has a not insignificant stake in the ownership of ITEX.   Any comments Parsad?

 

 

 

 

 

[Parsad]

The only comment that I have is that if a certain someone, had not thrown his votes behind Steve White and had voted for us in last year's proxy solicitation, the current poison pill and stock grant agreement would never have occurred.  He not only shot us in the foot, but himself and all other non-executive shareholders. 

 

I really have an utter disregard for executives who do things solely to benefit themselves...be it at Biglari Holdings or ITEX.  It reeks of self-dealing and is a disservice to the people they work for!  But everyone can change and decide for themselves how they want to be viewed and portrayed.  Do you want to have a strong corporate culture and have a loyal shareholder group, or do you want a culture that is less than ethical with dissension among your shareholders?  It's completely up to them what they want.  Money isn't everything!  Cheers!

[Munger]

my guess is that biglari concluded that if he wants new ownership, he wants to be the new owner to be BH

 

anyone who has conviction about the sustainability of cash flows, could only conclude the stock is extremely cheap...personally i don't have that conviction but have to assume that since biglari owns close to 10% of the company, he has at least some conviction about the cash flows...

 

will be very interesting to see how this story unfolds

 

the ITEX CEO is inviting trouble for himself by trying to steal from shareholders

[Ballinvarosig Investors]

We seem to be seeing something of a trend with Biglari; he might be able to spot value, but he is completely incapable at judging, or dealing with people. While he had initial success with Friendly, Western and SNS, that was before he was exposed as a cockroach. Who will want to do business with a man who is so greedy, tactless and completely devoid of empathy? For someone who models himself on Buffett, can you ever imagine selling their family business to him?

[Guest Bronco]

Parsad - first - for your sake, I hope your lousy team makes it to the finals.  At this point, I would feel lucky if the Flyers can tie their damn laces on their skates.  Guess we miss Pronger.

 

 

We may have touched upon this in the past - but for the sake of the thread - can you (and others) post the best management teams you have seen, not in terms of competency but in terms of morals, ethics, etc.  BTW - no need to mention Prem, we all got that one as a gimme.

 

 

 

 

[nodnub]

Bronco, that's a great idea.

 

I suggest starting a new thread to make it easier to keep track of.

[Parsad]

In terms of morals and ethics (excluding straight performance & excludng Berkshire and Fairfax):

 

No particular order - Markel, Overstock.com, Google, Costco, Leucadia, Sears Holding, Rainmaker Entertainment (yes, it's tiny, but Tim, Francis & Jeff control most of the stock)...there's probably others that I haven't mentioned.  Oh yeah, Corner Market Capital & the MPIC Funds, and any public vehicle I'm directly involved with in the future!   ;D  Cheers!