Wednesday, 21 October 2009
Equity for Punks
I'm sure there will be a myriad of blogs about this event over the coming days so i'll keep it short and sweet.
Yesterday BrewDog announced they are offering 10,000 shares in the company at £230 a pop. These 10,000 shares equate to a 9% share of the overall business, if all of the shares are bought it will make BrewDog £2.3million, which is to fund a new eco-brewery. If 9% of the company is worth 2.3million is 100% really worth 25million?. No it isn't. In terms of asset, including intellectual property it probably isn't even worth £1million.
Also, it was announced two new partners had joined the business having sold their share in the 1billion pound Skyy Vodka brand. These guys also own a U.S. based distribution centre and I would guess BrewDog have plans to expand and export to the U.S. This really is a contradiction in terms, a new eco-brewery is being built to have their beer shipped round the world on a great big, dirty, fuel oil burning container ship......
Finally, BrewDog is a young person's brand, there is no hiding from that. Their viral media advertising, heavy usage of bloggers to promote beer and their edgy 'punk' image attract a younger beer drinker. Not a bad thing but as a young person I really can't think of many people my age who have a spare £230 lying around to have a punt on shares in a brewery. I know i certainly don't have that sort of cash lying about!
That said and done, let us not forget that BrewDog have given the industry a real shake up since they started and that within two years they have a national brand and a massive cult following. I tip my hat to them for the sheer audacity of the equity scheme, only time will tell how successful it is. I went to the launch night last night with lots of the beer bloggers and drank copious amounts of Punk, Punk Monk, 77 and Paradox, so for that BrewDog, many thanks. I also had a long chat with Martin about the joys of hand loading 4-head counterpressure bottling machines, very geeky.