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Over the years, Starbucks (NASDAQ:SBUX) has provided outstanding returns to its long-term shareholders. Knowing this, some folks might try to replicate those gains with SilverBox Engaged Merger (NASDAQ:SBEA) as SBEA stock is still relatively inexpensive.
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On Nov. 2, 2021, SilverBox Engaged Merger, announced that it was merging with Black Rifle Coffee. Around that time, a New York Times article asked, “Can the Black Rifle Coffee Company Become the Starbucks of the Right?”
Think about it: Starbucks doesn’t just offer a cup of coffee. It also provides a brand and an attitude. The same thing could be said about Black Rifle Coffee – though the brand and attitude of that company are decidedly different from those of Starbucks.
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Admittedly, SilverBox Engaged Merger’s investors haven’t enjoyed Starbucks-like returns yet. However, this might represent a ground-floor opportunity as Black Rifle is a truly unique business.
A Closer Look at SBEA Stock
Like many special purpose acquisition company (SPAC) stocks, SBEA stock clung to the $10 area before jumping after the shell company’s merger announcement.
When the stock shot up to $15 in November of 2021, the sentiment was bullish and $20 seemed like a done deal. There are no done deals on Wall Street, however, and the share price quickly pulled back to $10.
Since that time, SBEA stock has stayed near $10, which is undoubtedly frustrating for some long-term investors. Wasn’t this supposed to be the “next Starbucks”?
Patience is definitely required here. On Jan. 13, 2022, SilverBox Engaged Merger announced a meeting date of Feb. 3 to approve the proposed business combination with Black Rifle’s parent company, Authentic Brands.
That event might catalyze SBEA stock and push it closer to $15. Beyond that, the investors should consider Black Rifle’s long-term value proposition as a business with a strong focus in a niche market.
A Different Kind of Coffee Shop
Founded in 2014 by Green Beret Evan Hafer, Black Rifle Coffee can be described as a conservative-leaning, patriotic company. It is committed to supporting America’s veterans, active-duty military and first responders.
There’s also a focus on guns, as the company’s name would suggest. As a Wall Street Journal article explains, Black Rifle Coffee “sells pricier coffee and firearms-themed products such as its AK-47 Espresso Blend.” The company also sells branded apparel.
Along with all of that, Black Rifle is committed to giving back to the community. The company estimated that in 2021, over $1.2 million would be given back to charitable organizations, and more than $3 million worth of coffee would be donated to military and first-responder units.