In a recent transaction, Andrew Wiederhorn, a director of Fat Brands, Inc. (NASDAQ:FAT), has increased his stake in the company by purchasing additional shares. The transaction, which took place on June 11, 2024, involved Wiederhorn buying 646 shares of Series B Cumulative Preferred Stock at a price of $14.21 per share, amounting to a total investment of $9,179.
This purchase has boosted Wiederhorn's direct holdings in the company to 1,642.6 shares. Additionally, it's worth noting that Wiederhorn is associated with Fog Cutter Holdings LLC, which directly owns 1,000 shares of the same stock class. However, Wiederhorn has stated that he disclaims beneficial ownership of Fog Cutter's holdings except to the extent of his pecuniary interest.
The recent buy signals a positive sentiment from Wiederhorn towards the company's prospects. Fat Brands, headquartered in Beverly Hills, California, operates in the retail-eating places sector and is known for its involvement in the restaurant industry.
It should be noted that the reported transaction may involve short-swing profits under Section 16(b) of the Securities Exchange Act of 1934. Wiederhorn has addressed any concerns by calculating and disgorging the full amount of any recoverable profits to Fat Brands. This amount was stated to be not material to the financial statements of the issuer.
Investors often keep an eye on insider transactions as they can provide insights into how the company's leadership perceives the business's value and potential. With this latest purchase by a director, market watchers may take a closer look at Fat Brands' performance and future outlook.
In other recent news, FAT Brands Inc. has made several significant announcements. The company has confidentially filed a registration statement with the Securities and Exchange Commission for a potential spin-off of its Twin Peaks and Smokey Bones restaurant brands. This strategic move is aimed at enabling these brands to operate independently and is contingent on several conditions, including SEC approval and the final approval from FAT Brands' board of directors.
In addition, FAT Brands has faced legal challenges, with the U.S. Department of Justice indicting the company for alleged violations of the Sarbanes-Oxley Act related to unauthorized credit extensions. The U.S. Securities and Exchange Commission has also filed a complaint against FAT Brands, alleging multiple violations of securities laws.
On a positive note, FAT Brands has announced the expansion of its Hurricane Grill & Wings brand to Six Flags (NYSE:SIX) Great Escape Lodge in Queensbury, New York. This marks the brand's first venue in upstate New York and reflects the company's growth strategy.
In its first quarter of 2024 financial results, FAT Brands reported a 43.8% increase in total revenue to $152 million and a 4.8% increase in system-wide sales to $581.8 million, despite a net loss of $38.3 million for the quarter. The company also plans to open 125 to 150 new units this year and is preparing for a Twin Peaks IPO. These developments highlight FAT Brands' ongoing strategic efforts and its commitment to growth and expansion.
InvestingPro Insights
As Andrew Wiederhorn increases his stake in Fat Brands, Inc. (NASDAQ:FAT), it’s crucial to consider the company's financial health and market performance. Fat Brands has been grappling with a significant debt load, as indicated by one of the InvestingPro Tips, which highlights the company’s operation under a substantial debt burden. This is a critical factor for investors to monitor, given its potential impact on the company's financial flexibility and growth prospects.
On a more positive note, another InvestingPro Tip points out that Fat Brands has succeeded in raising its dividend for three consecutive years, demonstrating a commitment to returning value to shareholders despite the challenges it faces. This could be a sign of confidence from the management in the company's ability to generate cash flow, which is further supported by analysts anticipating sales growth in the current year.
Looking at the real-time metrics from InvestingPro, Fat Brands has a market capitalization of $90.96 million USD and a dividend yield of 10.48%, as of the last dividend's ex-date on May 14, 2024. Additionally, the company has seen a revenue growth of 26.77% in the last twelve months as of Q1 2024. However, it's important to note that the company is trading near its 52-week low with a price of $5.32 USD, which could indicate a potential undervaluation or reflect investor concerns about the company's future performance.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that could provide more insights into Fat Brands' valuation, profitability, and stock price volatility. Investors looking to leverage these insights can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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