I've owned and sold a handful of publicly traded sports stocks this year, among them Atlanta Braves owner Liberty Braves Group (BATRA) and Manchester United (MANU) as well as Redball Acquisition Corp. (RBAC) , a special purpose acquisition company (SPAC) that flirted with team ownership but failed to get the job done. However, I won't be buying shares that are going on sale here on Tuesday of a legendary sports franchise.
The Green Bay Packers are selling 300,000 shares starting Tuesday at $300 each. This is the sixth time the company has sold shares since 1923, and the first since 2011.
Other than not being a Packers fan, I am passing because this is nothing but a gimmick. You can't sell your shares, they pay no dividends and they only can be transferred to immediate family. I laughed when I saw that you are limited to buying 200 shares -- that's $60,000 -- to own shares that really don't represent ownership or an economic interest. But plenty of folks will shell out $300 for a share; I am assuming they will receive a stock certificate to hang on the wall. You've got to hand it to the Packers, though, they'll raise up to $90 million on the sale.
One offering I will be following, though, is that of Black Rifle Coffee, which SilverBox Engaged Merger Corp I (SBEA) , a SPAC, plans to take public. While I am not a fan of Starbucks (SBUX) coffee, we've had plenty of Black Rifle Coffee in the house after being introduced to it by our nephew, a Marine who was tragically killed in action in Afghanistan in April 2019.
In somewhat typical fashion these days for SPACs announcing deals, SilverBox soared 60% intraday on Nov. 2, the day the deal was announced, but shares settled down to close up 15% on the day. Since then, they've pulled back 10% and are up just 6% since the announcement.
Black Rifle, which in 2020 posted $164 million in revenue, 84% of which was direct to consumer, is projecting its revenue to rise to $430 million by 2023, of which $199 million, or 46%, is expected to be direct to consumer. These projections assume significant growth in both its wholesale business and what the company terms "outposts."
Black Rifle's public offering illustration (from the company's investor presentation) assumes an enterprise value (EV) of $1.711 billion, which is comprised of 191.4 million shares at $10 each less $203 million of pro forma net cash. These assumptions value Black Rifle richly (to this value investor) and are clearly based on a growth strategy that needs to be executed. Like any other name, if I can get it cheap enough I might take a swing, but it's too early for me to take a stake in Black Rifle via SilverBox.
I nonetheless admire the company's commitment to veterans in hiring and its intention to donate at least 530,000 shares to the Black Rifle Coffee Company Foundation, the mission of which is to better the lives of veterans. Plus, the coffee is great, too.