Don’t count your beer barrels before they brews

If you are interested in investing in a successful beer company, the one that GFF has a few shares in is raising money right now.  What does this mean for our finances?  Well the selling price now at £25/share is £10 a share more than what you could have bought for at the recent (poorly participated) trading day.

The Beerco in question is quite well-known and has many loyal fans, customers and shareholders.  I had one of their beers the other day and found it to be very good.  If you like IPA style beers (dare I say it craftbeer), then this is a company that you probably know very wekk.

As I mentioned here; GFF invested in the beer company back years ago – (like any good aspiring hipster, before it was popular) – and now a good bit of our net worth and FIRE funds are tied-up in the company.

Image result for don't count your chickensThis jump in £10 per share poses a bit of a conumdrum for GFF, that is the buying price now and when you buy (memebership to the club) shares you get some enticements and discounts.  That might make the actual “value” of the company £20 per share. Still, that £20 is £5 per share more than I have them marked down in the Gentleman’s Family Office accounts.  With 2,800 shares owned it’s quite a leap.

Earlier this year, I marked the shares down from £23.75 to £15.00 to reflect the prevailing trading conditions. I was not too happy about the trading price, or the fact that I didn’t sell any shares on the trading day. But, that’s life, I think that the company’s prospects are still good – and they have ambitions to float on the stockmarket in 2020 which is my current exit strategy. But this is all a bit like holding eggs in my hand and thinking of having chicken korma for dinner.

There’s a broader question on how do you value a growing company that is profitable but is sucking in more investors money and not paying any out in dividends yet?  I’ll leave that to the experts.

It has made me have a look at what valuation I have on my assets.  I own a barrel of whisky – stuck in a bonded warehouse in Islay.  As they say, “you can’t take it with you”. I have looked at selling that and have offers but the difference between best and second best is about 10%.

We also own a house that we paid a certain price for, was valued at £20k more and according to ROS is worth about 12% more than we paid for it 3 years ago.  We have spent money on it (sunk cost?) and we could replace the windows (£20k maybe) and any other number of things to it.  But if push came to shove, we might struggle to sell it before the end of the year.

I also have a final salary pension that I value at 20x the annual amount.  That’s pretty conservative and I could maybe transfer it out for 40x the current value.  I also don’t count our state pensions (the Lady’s is worth £0 now but in a year or two she’ll have served the 10 years min to be entitled).  How does all that go in to the mix?

So, I’m glad that beerco has decided to sell shares at £25 a share.  £15 would value the company at about £12 or so a share – so any increase on that is good news for me.  But I’m not going to be toasting to my ingenious investing acumen just yet – I’ll wait until I actually sell-out. Until I sell, beerco represents a lot of our potential FIRE funds – money that I’d much rather have in liquid investments than tied-up – part of the steps in the right direction program.

Thanks, GFF

9 Comments

  1. We have been considering investing in a beerco, attracted partly by the shareholder perks.

    The only previous time we invested for perks we didn’t use them at all, and still the investment paid off handsomely.

    But that was then.

    Like

    1. I’ve saved a lot from my precious member’s discount over the years but not much recently.
      I’ve also sold off about half my holding for 4 times my initial stake – but at only £5 a share vs. The £25 sale price now.
      It’s all about exit strategy.

      Like

  2. I’m not going to invest this time round as I want to concentrate putting more into my ISA. That said, I only have a very small holding from the last round of fund raising. Great to hear how they are going from strength to strength and their beers are among my favourites. I do like my IPAs but prefer the session ales so I don’t fall over after only having a couple!

    Liked by 1 person

    1. I am more of a Belgian beer fan and now that I am a family man, getting excited about beer feels like a part of my life that is over now.
      Glad to hear you also invested – the perks are pretty good and it’s good to be part of something too!

      Liked by 1 person

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