14 April 2017

Sounds good, but ...

There's always a "but".  Earlier this week, The Guardian reported:
Early investors in “punk” beer firm BrewDog will be able to bank a hefty profit this week. An injection of cash from a private equity house valued the company at £1bn, 10 years after it began life in its co-founder’s mother’s garage.
San Francisco-based TSG Consumer Partners agreed to buy 22% of BrewDog, whose idiosyncratic beers and international network of bars have won it a cult following, in a deal worth £213m.
Some £100m will be invested in the business while TSG, which also owns US brewer Pabst, also spent £113m buying shares from existing investors, according to the Sunday Times.
Founders James Watt and Martin Dickie are understood to have made £100m between them as a result of the deal, a decade after they used a £20,000 bank loan to start brewing in Fraserburgh, Aberdeenshire.
BrewDog’s army of nearly 50,000 “Equity Punks”, its name for investors in four previous rounds of crowdfunding, will be able to sell up to 15% of their shares from this week, the company said.
Watt told investors that they stand make a return of 2,800% if they were among those who bought in at the first opportunity in 2010.
I am one of those early investors and was looking forward to that 2800% return.  My initial investment of £3250 would now be worth over £90,000.  Whoopee!  The sale of 15% of my shares would return over £12,000.

I have now received Brewdog's offer to buy 15% of my shares.  Alas, the price they are offering is a mere £13.18 per share, limited to a maximum sale of 40 shares.  That delivers a paltry £527.20.

So, while Messrs Watt and Dickie are laughing all the way to the bank with their £100 million, it would appear that whatever largesse is available is not being fairly shared with the ordinary shareholders.

That will teach me to invest in start-ups.  And, no, I have not sold my forty shares.  Maybe at some point in the future, a proper market for BrewDog shares will be established.

 

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