Randian Capital suggests One Group IPO Benihana amid stock slump

Investing.com -- Investor Randian Capital had continued to call on One Group Hospitality Inc (NASDAQ:STKS), asking the company to pursue an initial public offering of its Benihana chain as shares trade at all-time lows.

In a post on X, Randian said it has “concerns the Board and management are not doing enough to maximize shareholder value,” following what it described as a disappointing third-quarter earnings call. The firm reiterated its belief that One Group’s assets, particularly Benihana, are deeply undervalued by the market, and that immediate structural changes are required to reverse the company’s decline.

Randian outlined a five-point plan that includes suspending all new growth capital expenditures, replacing social media marketing with a single celebrity brand spokesperson, and focusing all operational resources on improving in-restaurant experiences. It also called for a review of executive expenses, and proposed that board compensation be paid entirely in equity rather than cash.

But the centerpiece of Randian’s latest proposal is an IPO of Benihana, the iconic Japanese dining brand that now contributes more than half of One Group’s total revenue.

“We would like to see management seriously explore an IPO of Benihana and also see additional transparency and disclosure on expenses," Randian emphasized in a comment to Investing.com.

The activist estimates Benihana generates roughly $75 million in LTM EBITDA and could command an 8x multiple, implying a standalone valuation of $600 million, roughly six times One Group’s current market capitalization. Randian argues that floating 20–30% of Benihana could raise $150 million in cash to deleverage and refinance the company’s balance sheet, potentially saving “tens of millions annually” in interest expense.

The post follows One Group’s third-quarter earnings, which showed a net loss of $0.75 per share, missing consensus estimates by $0.59, on revenue of $180.2 million, below expectations of $191 million. The company guided fiscal 2025 revenue to between $820 million and $825 million, below analyst forecasts, further fueling investor frustration.

Shares of One Group have fallen over 60% in the past six months, as debt concerns and integration costs weigh on sentiment. The stock traded around $1.80 this week, down from above $3 in late September, when Randian first published a turnaround plan.

Randian, which contributed to the retail activist campaign behind Opendoor Technologies Inc (NASDAQ:OPEN), has been publicly pressing One Group since September to restructure around Benihana, arguing that STK Steakhouse and other holdings should be divested.

Earlier proposals included converting both brands to franchise-heavy models, rebranding the company as “Benihana Group” under the ticker HANA, and incentivizing celebrity partnerships through equity-linked deals.

Management, led by CEO Manny Hilario and CFO Nicole Thaung, has yet to formally respond to the activist’s latest suggestions. One Group Hospitality didn’t respond to Investing.com’s request for comment.