This Just In: Western Sizzlin to Trade on NASDAQ

Western SizzlinWestern Sizzlin (WSZL) just issued a press release announcing that its stock has been approved for listing on the Nasdaq (NDAQ). The company’s common stock will begin trading under the symbol WEST on Monday, February 25, 2008.

I have been expecting Western Sizzlin to announce the listing of its stock on the Nasdaq sometime this spring ever since I discussed my rationale for investing in Western Sizzlin. This announcement comes sooner than I expected. This is the special situation event I’ve been waiting for the Western Sizzlin position I own in Special Situations Real Money Portfolio.

I will be watching closely on Monday to see how Western Sizzlin stock reacts to its new trading market. My guess is that trading volume for WEST will be significantly greater than it has been for WSZL, which has been trading on the OTC Bulletin Board. This increased volume is likely to make it easier for institutional and private equity buyers to invest in this undervalued stock.

In addition to holding Western Sizzlin in the Special Situations Real Money Portfolio, I also have a position in my Fat Pitch Financials Port. The goal of the FPF Portfolio is different than that of the Special Situations Port. The Fat Pitch Financials Portfolio seeks to invest in wide moat companies trading at price levels that provide a significant margin of safety. Therefore, I will be holding on to my Western Sizzlin position in the FPF Port until WEST share price approaches $28.

There are also two other key developments to watch regarding Western Sizzlin. Western Sizzlin’s exchange offer for ITEX Corporation (ITEX) will be ending on February 28th. Just a week later, the Steak & Shake (SNS) annual meeting will be held, where Sardar Biglari and his colleague Philip L. Cooley will attempt to win two Board seats as part of Western Sizzlin’s plan to shake up Steak n Shake. This next couple of weeks will be a major turning point in the transformation of Western Sizzlin from a steakhouse into a potential mini Berkshire Hathaway.

Disclosure: I own shares of Western Sizzlin but hold no positions in the other stocks mentioned in this article.

6 thoughts on “This Just In: Western Sizzlin to Trade on NASDAQ

  • February 22, 2008 at 10:10 pm
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    I agree with the volume being a huge factor.

    Some days I have seen that WSZL doesn’t even get traded! That is pretty amazing. WEST should show up on institution screens now.

    I also own shares.

  • February 22, 2008 at 11:08 pm
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    It’s actually pretty common to see OTC Bulletin Board stocks that don’t trade for several days. It is just surprising to see a company owned by a talked about investor, like Mr. Biglari, not trade too much. However, when you think about it, Berkshire Hathaway A shares don’t trade too much either.

    One thing I forget to mention in my post concerns new Nasdaq and NYSE listing, especially former OTC BB and Pink Sheet stocks. Does anyone know how to find out what companies are going though the process of being considered for listing? Is there a better way than searching for press releases issued by the companies? Please share.

  • February 23, 2008 at 6:02 am
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    Exactly, I was really more astounded at the fact that a company with a guy like Biglari running it would have such low volume.

    A shares are also traded rarely because of the sheer size of the share price. Even though it really should not make a difference, especially for institutional investors.

    Anyway, let’s hope the listing leads to a fair price.

  • February 23, 2008 at 9:00 am
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    The stock should see a nice move up as the index funds have to buy the shares.It’s going to be interesting how WEST performs in the future now that it has more eyeballs on it.

  • February 23, 2008 at 11:06 pm
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    You also have to remember that the directors of Western own a significant amount of the outstanding shares. The effective float is a lot less than the 1.8MM shares outstanding. Also the value of Western is pretty much fair value right now. There are some variables, primarily SNS & ITEX that may change that but that is my personal opinion.

  • February 25, 2008 at 10:15 am
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    *correction there are 2,697,000 shares outstanding as per the NASDAQ site this morning, but highly concentrated ownership nonetheless

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