Editor’s note: This article was updated on Feb. 10 to correct the spelling of Evan Hafer’s name.
Since the year began, fans of the so-called Trump trades have been waiting for news of the launch of Truth Social. The social media arm of the Trump Media and Technology Group (TMTG) took markets by storm in October 2021. Today, its blank-check partner, Digital World Acquisition Corp. (NASDAQ:DWAC) is down. However, the special purpose acquisition company (SPAC) partner of another company popular in former President Donald Trump’s circle is rising. SilverBox Engaged Merger Corp. (NASDAQ:SBEA) is gearing up to take Black Rifle Coffee Company public. SBEA stock is up today as investors prepare for an important decision from shareholders.
What’s Happening With SBEA Stock
On Jan. 13, SilverBox announced that its board would be meeting to vote on the proposed merger with Black Rifle Coffee on Feb. 3. That day is here, and Wall Street is anxiously awaiting the verdict on the merger. Everything we’ve seen so far, though, indicates that Silverbox will receive the shareholder votes it needs to merge successfully with Black Rifle Coffee.
SBEA stock spiked as markets opened this morning, shooting up almost 3% within the first 30 minutes of trading. It hasn’t stopped rising since then. As of this writing, it is up more than 3.6%, and the momentum doesn’t seem to be subsiding. However, the stock has seen some turbulence this week. Multiple plunges have left it in the red by 3.4% for the past five days and nearly 6% for the month. That said, today is likely to bring the turnaround that SBEA stock needs to finally start growing.
Why It Matters
“A controversial company in some ways, this merger has made SBEA stock somewhat of a political lighting rod and a popular option for traders recently,” reports InvestorPlace contributor Chris MacDonald. That’s certainly an accurate assessment. The coffee company was founded by veterans and claims to prioritize hiring and helping those who have served their country. Black Rifle has made it clear where it’s political allegiances lie, though. The company’s founder Evan Hafer has expressed support for Donald Trump and adorned his company website’s with pro-military and pro-law-enforcement merchandise.
As the New York Times reported, the company has largely succeeded by “leaning into America’s culture war.” From the company’s sales figures, though, it’s clear that this business model has proven effective. Black Rifle has been endorsed by conservative firebrands such as Donald Trump Jr. and Fox News host Sean Hannity. And it is gearing up to go public at an opportune time, as momentum from Trump’s base mounts in anticipation of Truth Social’s launch.
It’s true that this year has seen Black Rifle Coffee come under fire from some of its fans. The company publicly denounced some of the extremist groups of the American far-right in 2021, angering some of its fans. That doesn’t mean, though, that SBEA stock will be negatively impacted. Interest in the company is high. As Truth Social continues to draw interest, other stocks with ties to Trump will ride the wave.
What It Means
It’s also worth noting that SBEA stock has the potential to capture the fascination of the contrarian investors of Reddit and Twitter (NYSE:TWTR). The company has billed itself as the right wing’s answer to Starbucks (NASDAQ:SBUX). Hafer has criticized the coffee giant’s commitment to hiring refugees. Anyone looking to bet against Starbucks or liberal culture in general will likely be drawn to SBEA stock.
If the board votes in favor of the merger today, SBEA stock will be well-positioned to grow in 2022 as it rides the wave created by Trump. Momentum will only increase as he moves toward announcing a 2024 presidential campaign. Black Rifle knows this and is ready to tap into the movement’s energy.
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.
