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Black Rifle Coffee (BRCC) continues to perk after hot IPO

17:54, 11 February 2022

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Black Rifle Coffee cup
Black Rifle Coffee Company (BRCC) staged a successful IPO Thursday

Black Rifle Coffee Company’s (BRCC) stocks continued perking Friday a day after the veteran owned and operated business’s successful $1.7bn (£1.3bn) initial public offering (IPO).

The coffee seller’s stock jumped 23% in mid-morning trading on the New York Stock Exchange before giving back some gains. Shares were up about 2% to $15.91 at 13:35 ET (UTC-5).

The price-to-earning ratio was an unheard of 100.

Prior to its market debut, BRCC’s parent company Authentic Brand merged with the blank cheque firm SilverBox Engaged Merger Corp I. Black Rifle said the IPO will help it hire 10,000 US military veterans.

Black Rifle Coffee Company stock jumped 43% in the company's first day of trading after completing a de-SPACing transaction.

Under the business combination, BRCC will add up to $150m in cash to its balance sheets to fast track its digital-first, omnichannel strategy to expand, the company said in a statement. SPAC Silverbox Engaged Merger Corp I shares shot up 17% when shareholders approved the merger with Authentic Brand.

BRCC’s sales venues are mainly specialty retailers, grocers, and direct-to-consumers. Recently, the company has focused on franchise opportunities.

Calls to analysts and BRCC by Capital.com went unanswered Friday morning.

Pro-gun causes

In the coffee wars, BRCC seeks to attract customers by deploying an aggressive pro-US, pro-gun, pro-military brand identity with product named AK Espresso, Silencer Smooth and Freedom Roast.

BRCC proclaims it is the anti-Starbucks, with political messaging via a podcast and print magazine, proclaiming it is “building upon the mission to serve coffee and culture to people who love America” while its target audience is the active-duty military, veterans and first-responders.

MAGA crowd

The marketing strategy appears to reflect a play on former President Donald Trump rallies with slogans like “Make Coffee Great Again” and “Coffee or Die”. Often the slogan is next to the Tea Party symbol of a dissected snake.

Earlier this week, BRCC’s CEO Evan Hafer said his company plans to double its advertising budget for Joe Rogan’s podcast, which has about 11 million listeners. Rogan is a controversial personality for his past usage of the N-word and well-publicised pushing Covid-19 conspiracy and false claims.

"He's probably one of the best men, I think, in America to be the voice for an entire generation," Hafer said of Rogan on Fox News.

Numerous artists announced in the last couple weeks plans to pull their music from Spotify over Rogan’s comments, including Neil Young, Joni Mitchell, Nils Lofrgen, David Crosby and Stephen Stills.

Further reading:

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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