INDIANAPOLIS The Steak n Shake Co. became the restaurant industry’s most expensive stock listing on Monday after the company executed a 1-for-20 reverse stock split that left shares closing at $293.00 each.
Prior to the reverse split, Steak n Shake shares had traded as high as $14.55, which was hit on Friday, and as low as $4.92 during the past 52 weeks. The move has reduced the number of outstanding shares from about 28.8 million to 1.4 million. In this reverse split, a shareholder would receive one share for every 20 that he or she owns, although the value of aggregate dollar holdings remains the same.
The company’s reverse split was undertaken to attract “knowledgeable, long-term owners,” said Steak n Shake’s chief executive, Sardar Bilgari. He outlined the rationale for the split in his letter to shareholders released last week.
“This change, we hope, will dissuade speculators from participating in our stock,” Biglari said. “We are attempting to eliminate those who erroneously think that it is easier for a $10 stock to go to $20 than a $200 one to go to $400.”
Steak n Shake, which posted last week a fourth-quarter jump in sales and profit, is in the process of reorganizing its operations into that of a holding company, and has agreed to acquire another restaurant company, Western Sizzlin’ Co., which also is helmed by Biglari.
Contact Sarah E. Lockyer at [email protected].
