Buffalo Wild Wings, in a bitter proxy fight with Marcato
Capital Management, trotted out a new group of peer companies
to illustrate its claim that its stock has outperformed a
basket of similar companies. In a new regulatory filing, the
casual dining company said its shares outperformed the basket
by 10.5 percent points over the past five years, 16 percentage
points over the past three years, and 18.3 percentage points in
just the past year.
"The casual dining peer group utilized by
Buffalo Wild Wings properly excludes companies that are
quick-serve, fast-food or delivery restaurants as well as
companies outside the restaurant industry," Buffalo said in a
regulatory filing. It then identified 14 companies that own
restaurants it does see to be peers.
In response, Marcato, which earlier accused Buffalo Wild
Wings of reporting erroneous peer group data, fired off a press
release accusing the company of masking its underperformance by
"changing its relative peer group as compared to its proxy
peers." In a statement, Marcato’s Mick McGuire
asserts, "The peer group Buffalo Wild Wings management used
today is the third different one presented by the company in
recent months. This desperate manipulation of the facts cannot
mask Buffalo Wild Wings’ persistent
underperformance and clear lack of any strategic plan to create
long-term shareholder value." Shares of Buffalo Wild Wings rose
slightly on Thursday, to $160.60.
Greenlight Capital’s battle with
General Motors also grew more intense on Thursday when the
hedge fund firm headed by David Einhorn sent a comprehensive
letter to shareholders that emphasizes "GM’s
significant valuation problem, poor stock performance and the
board’s failure to address these persistent
issues." It reiterated its assertion that its plan to split
GM’s stock into two classes could unlock $14 to
$40 billion of shareholder value.
In response, GM said in a press release, "After objective
and thorough review over a seven-month period,
GM’s Board determined that
Greenlight’s proposal to eliminate the dividend on
the existing GM common stock and distribute the proposed new
'dividend security’ creates an unacceptable level
of risk, would not create the value Greenlight indicates, and
would be detrimental to GM shareholders."
Shares of GM fell about 1 percent, to close at $33.16.
Several investment banks slightly raised their price targets
Facebook, the most widely held hedge fund stock, after it
reported mostly strong results for the latest quarter.
For example, Barclays raised its target from $154 to $160
but cut its earnings per share estimates for the next two
years. However, it retained its overweight rating on the stock.
In a note to clients, Barclays points out that the social media
pioneer reported revenue and cash flow that was above consensus
forecasts but in-line with its estimate. It also pointed out
that user growth and engagement continue to "ramp up" at
Facebook, calling these metrics "the most important part of the
overall bull case."
It acknowledges it is getting harder for the company to beat
revenue forecasts in a massive way, but adds, "We
don’t think it’s required anymore. We
would add to positions as investors digest that
FB’s margins are likely done going up for
UBS raised its price target from $165 to $168.
"FB’s solid across the board performance should be
the story that emerges from this set of results," it tells
clients in a note. Credit Suisse raised its earnings estimates
but kept its price target at $175.
Shares of Facebook fell less than 1 percent, to close at