The monumental rise of Digital World Acquisition (NASDAQ:DWAC) has taught us one thing — anything that former President Donald Trump touches has tremendous potential. When he announced that the Trump Media and Technology Group (TMTG) would be going public through a SPAC merger with DWAC, the stock surged by more than 90%. Today brought the announcement that a similar company is going public via a SPAC merger. SilverBox Engaged Merger’s (NASDAQ:SBEA) shares have been rising all morning, gaining 30% so far. SBEA stock may be the new DWAC.
Why could this be the case?
There’s plenty to unpack about Black Rifle Coffee, SilverBox’s merger partner, but the most important thing about the company is that it was founded with the mission of appealing to conservative consumers. Looking around its website, you’ll quickly notice the consistent themes of military, American flags and guns. Some coffee bean bags have camouflage patterns while others express support for America’s police. Company founder Evan Hafer is a military veteran and a supporter of Trump.
Black Rifle has a garnered a significant following in its mission to become the conservative answer to Starbucks (NASDAQ:SBUX), indicating that it has the potential to become a meme stock sensation when it merges with SBEA.
What else should investors know? Let’s find out.
What to Know About the Black Rifle Coffee Merger and SBEA Stock
- The Wall Street Journal reports that Black Rifle Coffee deal is valued at roughly $1.7 billion. The company’s revenue for 2020 is estimated to grow approximately 40% to $230 million. Its projected gross margins are approximately 40%.
- If the merger continues as planned, it will place an additional $255 million in additional cash on Black Rifle’s balance sheet to help scale further growth.
- While SilverBox is putting $100 million into the deal, Black Rifle is raising an additional $100 million in PIPE funds.
- Black Rifle has received endorsements from both Donald Trump Jr. and Fox News host Sean Hannity. The former president has never discussed it himself.
- The company is also a Public Benefit Corporation. Its holdings include the BRCC Fund, an organization dedicated to bettering the lives of U.S. veterans. Both merger partners will donate more than 530,000 shares to the BRCC Fund which which will likely be valued at approximately $5.3 million at $10 per share.
- In addition to selling coffee, Black Rifle’s website features an extensive selection of merchandise
- From its founding, the brand has taken a so-called anti-hipster stance, which is also reflected in its merchandise.
- Black Rifle came under fire a year ago when Kyle Rittenhouse was photographed in one of its t-shirts. In the photo’s caption, he praised the coffee, although the company has denied any affiliation with him.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
