Street Calls of the Week
Investing.com -- Retail activist investor Randian Capital has doubled down on its turnaround plan for One Group Hospitality Inc (NASDAQ:STKS) this week, pushing for bold changes after management downplayed its initial proposal. The firm now outlines an even more aggressive blueprint for revitalizing the iconic Benihana brand, with calls for strategic divestitures, influencer-driven equity deals, and a company-wide operational reset.
Shares of One Group, operator of Benihana and STK Steakhouse, initially rose over the $3 mark after Randian’s first plan posted on social media, but have since retracted as investor enthusiasm met management comments. CEO Manny Hilario and new CFO Nicole Thaung told analysts at Northcoast Research they had not engaged with Randian and were unaware if the firm held shares, reiterating that no changes to guidance or plans for capital deployment were being made.
Randian’s latest salvo lays out specific moves to unlock value, including exploring the sale of STK and other “non-core” brands, a move it estimates could yield $200 million to $300 million and fund share repurchases. The activist also argues for rebranding the company as “Benihana Group” under the ticker “HANA,” spotlighting the legacy chain’s dominant revenue contribution and untapped cultural relevance.
“Incremental change will not restore confidence,” Randian stated, citing Benihana’s deteriorating operations and lackluster marketing. “In 2024, STKS generated $44M in operating cash flow—yet trades at a market cap of just $80M,” the firm added, citing an implied free cash flow yield over 25% that investors have discounted due to potential mismanagement.
The activist’s most novel proposal is its push to financialize social media influence, urging One Group to offer stock options, not cash, to celebrities to forge deeper brand alignment. “Public companies should use influencer options to drive real operating performance,” Randian said in a social media post. “Equity deals buy you alignment. When the creator’s upside = the company’s upside, their attention compounds—not fades.” The firm advocated for partnerships with cultural icons, including Kim Kardashian and Rob Gronkowski.
Management, however, suggests its current strategy is working, pointing to improving traffic trends and a new loyalty program expected to expand in 2026. While it confirmed that brand divestitures remain an option, Hilario emphasized a broader strategy already in motion, noting already-closed Kona Grill and RA Sushi stores as evidence of alignment with long-term optimization goals.
With Benihana now generating over 55% of One Group revenue, CFO Nicole Thaung’s leadership has become central to any potential turnaround. A 15-year veteran of the Japanese dining chain who became its CFO in 2018, Thaung is expected to spearhead cost control, margin expansion, and consolidation, all critical as FY25 EPS is forecast to rebound to $0.34 after a sharp drop in FY24.
"We have released our 11 step plan to revitalize One Group Hospitality and Benihana. We would welcome Management releasing their plan to improve performance of the business as well as the stock,” Randian Capital said in a statement to Investing.com.
Representatives of One Group have not responded to several Investing.com inquiries.
Investors remain on edge. Analysts are divided, with price targets suggesting nearly 90% upside, but technicals and peer comparisons paint a cautious backdrop. Randian’s latest plan may have grabbed attention, but with management resolute and no formal shareholder campaign yet launched, the battle for STKS’ future is just heating up.