Jeffrey Moore

Notes from Steak 'n Shake's Investor Day

Yes, a lively, but fun discourse. :-)

I used the 1.5 million as a rosy scenario, since I thought it was the one you were operating with... I don't remember exactly what the locations sell foron average, but even if they sell for 1/2 million (in a fire sale) each, there isn't much downside for the common stock. I remember them selling some smaller (in terms of revenue) stores in the middle of Iowa for roughly 850K/ea. I have trouble wrapping my head around how their property plant and equipment can't be worth at least 1/2 what it is on the books for (which is after a Hell of a lot of depreciation). granted, a chunk of the PP&E is in stuff like fixtures that are not worth anything, but I still think I am being pretty conservative.

Personally, I would have a problem with them saying "location x is making this much money, z this much, and y is loosing this much"-too much info on operations that is not necessary to come up with a value for the company. The company is closing restaurants that are/have been under preforming (which will do a lot for cash flow and earnings), and guest count is no longer eroding as precipitously as before.

Their franchisees do quite well in terms of revenue, and I would imagine run their operations better than the company has historically, so re franchising is being done, and helps to up the overall value of the company.

this shareholder letter might help shed some light on things to come.
yahoo.brand.edgar-onli...

Please understand, that while 'propaganda' may not be numbers, that doesn't mean that it isn't true- after all, under good management, they will be quite profitable! The main part of the upside potential to this company is the capital allocation of Sardar Biglari.

On Jan 13 08:24 PM 123 wrote:

> correction at to #3: I meant to say that the stock is not trading
> below its (best case, for reasons above) "liquidation value", rather
> it's trading about equal to it