Steak n Shake (NYSE:SNS) may be in for a shake-up of its own after Sardar Biglari's Lion Fund increased its stake in the company from 7.3% to 8.6%, according to a Schedule 13D/A filing with the SEC. The activist hedge fund has been targeting the company lately, voicing their concern about mismanagement of the company by the present board of directors.

The move is welcomed by many investors frustrated with the company's recent performance. Shares in Stake n Shake have plummeted in recent weeks after it reported that net earnings dropped by more than 50 percent on same-store sales down 3.8% for fiscal 2007. According to one analyst, "I think the best way to describe it at this point is basically it's a big mess, and it's going to take some time to turn it around."

In fact, things have gotten so bad that disgruntled shareholders have formed a website (EnhanceStakenShake.com) and are placing billboard ads in the Indianapolis area lobbying for board seats. The campaign is spearheaded by The Lion Fund and is very similar to what happened when it lobbied for a sale of Friendly Ice Cream - which turned out to be a great success.

In the end, it is uncertain as to whether or not these efforts will pay off. The company has suffered horrible losses and shares are trading at a low. Many investors are hoping, however, that The Lion Fund can work to unlock shareholder value using the same successful tactics that it has in the past. Combined, these factors make SNS a stock worth watching!

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