Are you ready for a special purpose acquisition company stock that’s like no other? Not everybody will like SilverBox Engaged Merger (NASDAQ:SBEA), but I invite you to set politics aside for a moment and seriously consider SBEA stock.
Bear in mind, SilverBox is nothing more than a shell company. Its purpose is to bring a business to the financial market and make it available for trading.
I mentioned politics earlier because SilverBox is reverse-merging with a business that comes with some controversy. Folks who don’t want to invest in a company with a conservative angle, might not be interested in SBEA stock.
On the other hand, the target company is popular in its niche market, could even become the conservative answer to Starbucks (NASDAQ:SBUX). So, let’s explore what SilverBox Engaged Merger has to offer with an open mind and an eye toward profitability.
A Closer Look at SBEA Stock
Let’s backtrack a bit. On Nov. 2, SilverBox Engaged Merger announced that it’s merging with Black Rifle Coffee.
Now, it’s not unusual for pre-merger-announcement SPAC stocks to stay near $10. Thus, SBEA stock hovered near $10 until its upcoming business combination with Black Rifle Coffee was disclosed.
You can probably guess what happened to the share price when the merger target was revealed. Of course, it shot up like a rocket.
SBEA stock rallied to $15.75 on the day of the aforementioned announcement. However, the investors would soon cough up most of those gains. By the end of November, the stock returned to $10. At this writing, it’s still trading at $10 and change.
Some folks were probably hoping that SBEA stock would behave more like Digital World Acquisition (NASDAQ:DWAC) stock, which zoomed much higher and also has a conservative angle.
So far, though, SilverBox Engaged Merger hasn’t had a sustained rally. On the other hand, we can view this situation as an opportunity to load up on a few shares if you like Black Rifle Coffee’s business model.
Honoring the Heroes
At first glance, you might get the impression that Black Rifle just serves coffee, not unlike Starbucks and a host of other companies.
Yet, I invite you to take a closer look. Founded in 2014 by Green Beret Evan Hafer, Black Rifle sells coffee but is also on a mission to support America’s veterans, active-duty military and first responders.
In other words, you’re supporting America’s heroes when you buy coffee from Black Rifle. This should appeal not just to conservatives, but to every U.S. citizen.
Black Rifle Coffee’s commitment is genuine, as the company selects local heroes annually and donates $5,000 to a charity of their choice. Furthermore, Black Rifle has a long-term objective of hiring 10,000 veterans.
Plus, the company expects to give more than $1.2 million to charitable organizations this year, and over $3 million worth of Black Rifle coffee will be donated to military and first-responder units in 2021.
Not Just About Coffee
So far, Black Rifle Coffee sounds like a patriotic business that everyone can stand behind. However, before you consider owning SBEA stock, please be aware that Black Rifle isn’t just about coffee or patriotism.
This is a decidedly conservative company. Make no mistake about that. As a recent Wall Street Journal article explains, Black Rifle Coffee “sells pricier coffee and firearms-themed products such as its AK-47 Espresso Blend.”
That’s right: there’s a heavy emphasis on the Second Amendment with Black Rifle. I suppose you could have guessed this from the company’s name, but it’s still worth emphasizing.
The point is, just be aware that this is a niche business. Fortunately, Black Rifle’s management are apparently aware of this. The company’s investor presentation even has a U.S. map indicating better brand-awareness growth opportunities in Texas and Florida than in California and Connecticut.
So, at least they know who their target audience is.
The Bottom Line
I suppose you could call Black Rifle Coffee a niche business. If that niche includes America’s heroes, though, then perhaps you don’t have to be a gun enthusiast to appreciate the company’s mission and vision.
Clearly, Black Rifle won’t appeal to all investors. Or all coffee drinkers, for that matter.
If you don’t mind investing in a business that courts controversy, however, then consider giving SBEA stock a try.
On the date of publication, David Moadel 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.