Brewdog

[Feugh]

Chancers.

Brewdog's solid gold beer can ad misleading, ASA says

The advertising watchdog says three Brewdog adverts for a gold can competition were "misleading".

www.bbc.co.uk

The amount of negative press that they are getting, you would think that they are going to float on the stock market soon:

BrewDog appoints 'blue-chip reputation' chairman

Allan Leighton joins the Aberdeenshire brewing firm which had been hit by criticism from former employees.

www.bbc.co.uk

One thing is for certain, those who put money into the company in the early days ("equity for punks" or "equity for chumps"; Equity for Chumps: BrewDog’s Crowdfunding Model a Dubious Deal for American Investors) will be last in line when it comes to getting a good return.

 

[Rasputin]

Chancers.

Brewdog's solid gold beer can ad misleading, ASA says

The advertising watchdog says three Brewdog adverts for a gold can competition were "misleading".

www.bbc.co.uk

The amount of negative press that they are getting, you would think that they are going to float on the stock market soon:

BrewDog appoints 'blue-chip reputation' chairman

Allan Leighton joins the Aberdeenshire brewing firm which had been hit by criticism from former employees.

www.bbc.co.uk

One thing is for certain, those who put money into the company in the early days ("equity for punks" or "equity for chumps"; Equity for Chumps: BrewDog’s Crowdfunding Model a Dubious Deal for American Investors) will be last in line when it comes to getting a good return.

Anyone investing in these clowns should have just gone to the casino and put it on colour.

 

[NullMac]

Correct. They persuaded thousands of small investors to invest in “punk equity “ to bankroll company expansion before they sold a chunk of the company to private equity in the deal you describe above. It appears that the PE firm gets a guaranteed return in the case of a company sell off or IPO, which could leave the poor punks with nothing. Understandably, some punks are not too happy.

That's a particularly skewed viewpoint which while no doubt factually correct is misleading. Presumably what happened was:

Early round funding raised from lots of small investors because the business was small and unattractive to institutional investors. "Persuaded", really? Made you do it?

Later round funding after much growth where the value of the business had increased to £968m so they raised £213m. If I had shares in a company whose valuation had risen to ~£1bn, then my shares will also have seen a huge uplift so I should be very happy, not honking about someone else potentially making some money.

Of the £213m, £100m went into the business to fund its growth (I know, terrible) and the rest went to the founders and some small equity holders to lock in some rewards as bad things can happen (sensible).

Given the owners will have shares ranking below the PE guys it would be a surprise if they willingly sold/IPO the company at a valuation that gave them sod all on a chunk of their own shares. If **** happens then sure the PE money comes out first as it went in last, in theory certainly, but probably not as the banks will screw all the shareholders. The PE guys have £213m to lose so I don't think they will see themselves as being better off than you.

As to them getting a guaranteed return, presumably they have some sort of pseudo debt instrument that racks up a "guaranteed" return. This is only guaranteed if there is money to pay it. In a downside outcome, they will not see it as the banks will be taking whatever is going. For the small investor this type of instrument is a good thing as it means not all of the money is going in as equity and therefore a bigger share of the proceeds on a big sale or IPO will go to the equity holders ie the punk equity holders.

As usual "some punks" don't know what they are doing and are probably just genetically miserable anyway. In this case they may well have got very lucky but are too stupid to realise it...

 

[NullMac]

One thing is for certain, those who put money into the company in the early days ("equity for punks" or "equity for chumps"; Equity for Chumps: BrewDog’s Crowdfunding Model a Dubious Deal for American Investors) will be last in line when it comes to getting a good return.

You obviously have got the major hump with these guys. I am not a fan either, but you obviously don't know what you are on about.

Here is a quote from the link that you yourself provided that contradicts the assertions that you are making:

"Long-haul equity punks may have enjoyed serious market-beating returns thanks to the TSG deal. The S&P 500 returned one-year investors 18.75 percent in 2017; BrewDog shares bought in that year’s EFP IV round would have returned 177 percent. Punks who got in earlier saw even higher returns, according to contemporary reports, not to mention the chart BrewDog published celebrating the deal."

The title is clearly clickbait, but is probably also accurate for AMERICAN Investors. They are/were being invited to invest in what looks like a US subsidiary without an obvious way to get shares in an IPO or a sale. Exactly what you don't want to do. You extrapolated that to apply to all "equity punks" which is clearly incorrect and contradicted by the returns shown in the quote above.

This is the end of the free investment advice from me, as while you clearly need it, it is just as clear you don't want it.

 

[Apthorpe]

Given the owners will have shares ranking below the PE guys it would be a surprise if they willingly sold/IPO the company at a valuation that gave them sod all on a chunk of their own shares. If **** happens then sure the PE money comes out first as it went in last, in theory certainly, but probably not as the banks will screw all the shareholders. The PE guys have £213m to lose so I don't think they will see themselves as being better off than you.

Of course they're better off. For a start the £213m isn't their own money, secondly they hold shares with superior rights and guaranteed returns. It doesn't matter how much money each shareholder invested, what is important is that shareholders have equality of treatment which is not the case here.
That said, only a fool would have invested in BrewDog anyway (one of my friends did with great enthusiasm and is still foolishly happy to have done so), via such an obviously dubious and spivvy proposition.

As to them getting a guaranteed return, presumably they have some sort of pseudo debt instrument that racks up a "guaranteed" return. This is only guaranteed if there is money to pay it. In a downside outcome, they will not see it as the banks will be taking whatever is going. For the small investor this type of instrument is a good thing as it means not all of the money is going in as equity and therefore a bigger share of the proceeds on a big sale or IPO will go to the equity holders ie the punk equity holders.

As usual "some punks" don't know what they are doing and are probably just genetically miserable anyway. In this case they may well have got very lucky but are too stupid to realise it...

In fact, they are actually unable to realise (in the financial sense) it, because there is no liquidity for them and the company appears to have indefinitely postponed the one day per year when trading is facilitated, but certainly not guaranteed. Some may have a 177% or whatever alleged return, but in fact they don't because they have no market in which to cash out and take the profit.

 

[Feugh]

You obviously have got the major hump with these guys. I am not a fan either, but you obviously don't know what you are on about.

Here is a quote from the link that you yourself provided that contradicts the assertions that you are making:

"Long-haul equity punks may have enjoyed serious market-beating returns thanks to the TSG deal. The S&P 500 returned one-year investors 18.75 percent in 2017; BrewDog shares bought in that year’s EFP IV round would have returned 177 percent. Punks who got in earlier saw even higher returns, according to contemporary reports, not to mention the chart BrewDog published celebrating the deal."

The title is clearly clickbait, but is probably also accurate for AMERICAN Investors. They are/were being invited to invest in what looks like a US subsidiary without an obvious way to get shares in an IPO or a sale. Exactly what you don't want to do. You extrapolated that to apply to all "equity punks" which is clearly incorrect and contradicted by the returns shown in the quote above.

This is the end of the free investment advice from me, as while you clearly need it, it is just as clear you don't want it.

You're right, I do have "the major hump" with these guys, for the reasons in post 1.
With regards to the equity punks, I sincerely hope that they do make a good return, but I'm afraid that I doubt that they will. The company is renowned for their self-promotion whilst being economical with the truth (see the article about solid gold cans, just as a single example. The way that they got initial backing from the banks is another example) and I suspect that deals have been done so that institutional investors will take their slice without a worry for the punks that initially helped the company (with equity and by buying their product). Let's wait and see when they float, eh?
Thanks for the investment advice from you - I don't need it.

 

[martin_b]

Just for a bit of balance...(so be kind) Firstly I dont mind Punk IPA. I like hoppy beers and have a strong dislike of malty dark ales, but what i am greatful for is that when all this covid stuff kicked off last year and you had to queue to get into the supmarket Brewdog home delivered and at a reasonable price per can, for that alone I'm greatful