Today, investors are getting all fired up over an upcoming initial public offering (IPO). Indeed, 2021 may go down as the year of the IPO. A number of high-profile companies continue to come public, either in traditional fashion or via alternative arrangements such as special purpose acquisition companies (SPACs). For those interested in the coffee business, the upcoming Dutch Bros IPO is exciting. Indeed, there appears to be a number of future investors in BROS stock that can’t wait to grab a slice of this company.
Dutch Bros has a business model that has grown impressively in recent years. This Oregon-based company has seen its total number of locations balloon to 470, with many more locations expected to come. Like larger peer Starbucks (NASDAQ:SBUX), investors may rightly want to take a flyer on the potential growth of this coffee chain.
After all, there appears to be plenty of room for another drive-through coffee chain through the rest of the country. Right now, Dutch Bros is focused mainly on the western U.S. However, this brand has grown quickly, with expectations that a national rollout could be successful in spurring investor interest.
As this company prepares to go public Wednesday, let’s dive into a few things investors may want to know.
What to Know Ahead of Dutch Bros IPO
As previously mentioned, Wednesday is the anticipated start of trading for BROS stock. The company’s seeking a valuation of $3.3 billion at its IPO.
According to an updated S-1 form, it’s expected Dutch Bros will price its share in the $18 to $20 range. It’s expected that the gross proceeds from this IPO will bring in around $400 million in growth capital for Dutch Bros.
Currently, a $3.3 billion valuation would value each of the company’s locations at around $7 million apiece. Of course, investors are pricing in much higher growth over the long term. The expectation is that Dutch Bros will be able to leverage the capital raised via this IPO to accelerate its growth.
That said, it remains to be seen what the market reaction to this valuation will be. Indeed, BROS stock will be one for investors to keep an eye on in the coming weeks.
