Bilgari Holdings(BH) Chairman and CEO Sardar Biglari has, on multiple occasions, let us all know that Biglari Holdings is a ‘jockey stock’ and that he is the ‘jockey’. It seems though, that the horse’s owners continue to resist his orders. Biglari first tried to classify the stock in February 2011, but was unsuccessful in that attempt. More recently, Biglari proposed a modified plan on October 5, scheduling a special meeting for November 2.
On November 2, the day of the meeting, Biglari abruptly delayed it until December 14. Most recently last night at 9:15, hours before the scheduled meeting, the company announced that the meeting would be delayed once again with no new date proposed.
Clearly, Biglari is finding that the support for his proposal is not there among shareholders. This should not come as a surprise to anyone. The stated justification for the move is unconvincing- it is clear to all that this is a transparent attempt by Biglari to usurp more authority for himself at the expense of shareholders.
Biglari deserves credit for his successful turnaround of Steak N Shake. However, this should not give carte blanche to his megalomaniacal delusions. Despite the company’s name change and claims to be a diversified holding company, the firm has no significant operating business beyond Steak N Shake, despite several years of effort. Biglari’s reputation has become a competitive disadvantage in pursuing acquisitions. His annual letters are notable for their vacuity, pages of high-falutin’ language saying nothing more than “I’m smarter than you, I’ll do what I want, and if you don’t like it, sell.”. Well, shareholders are sending a message to Biglari over and over again- “we’re still here, and there are limits to your power”
It’s becoming increasingly clear that Biglari’s inability to work well with others, his narcissism, his dishonesty, and his limitless greed will outweigh his intelligence and operational skills. We have been selling off our stake over time and will continue to do. Biglari’s reckless behavior cannot be trusted.
Disclosure: The author owns shares in BH