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Black Rifle Coffee Going Broke? | BRCC Hit With Lawsuits, Tanking Stock - YouTube
Channel: Liberty Doll
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(heart monitor stops) (dramatic music)ï»ż
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Well, Black Rifle Coffee is in trouble again.
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For the third time.
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But this time, weâre not just talking about
some mean words and bad PR being thrown around
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- no, this time, itâs looking like the company
is collapsing in on itself under a trifecta
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of tanking stocks, a fraud investigation,
and two -count it, two - lawsuits.
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Weâre talking financial fraud, market manipulation,
contract violations, huge losses, you name
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it.
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Trouble is definitely brewing - stick around
for the details.
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(intro music)
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Hello ladies and gentlemen and welcome back
to the channel.
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Before we go on this deep dive, and it is
deep, this video is sponsored by Brownells
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and their forever guarantee.
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Brownells has a huge selection of over 90,000
products of anything and everything from freedom
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seeds to emergency gear.
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Their website is constantly updating with
new deals and promotions you wonât find
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anywhere else.
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Whether youâre an outdoor hobbyist, a gunsmith,
a tinkerer, law enforcement, or just someone
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looking to put food on the table, theyâll
have everything you need.
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To check them out and support the channel,
use my link down in the description.
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Also, I do want to mention, I sometimes get
comments from folks asking why I sell Black
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Rifle Coffee despite all of their issues.
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I AM an affiliate with a different company,
BlackOUT Coffee, Theyâre been super supportive
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of the channel, the second amendment, and
veterans, and are a completely different company.
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Iâve never been affiliated with Black Rifle
Coffee in any way.
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Now that thatâs out of the way, letâs
do a quick rewind in case you missed the first
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couple videos on how this mess all started,
which Iâll also link up in the cards.
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First mistake - the company came out and denounced
Kyle Rittenhouse.
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Then, CEO Evan Hafer very stupidly did an
interview with the New York Times, where he
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complained about his customers being dumb
white supremacists and lumped Kyle into that
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camp.
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The article also talked about pulling designs
because theyâd allegedly been linked to
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racism.
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This of course ignited some backlash, but
the company initially doubled down, then claimed
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the statements were taken out of context.
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Shortly after, a couple team members did a
podcast where again they claimed things were
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taken out of context, but at the same time
again suggested their customers are fat, stupid,
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racist, military-wannabes and somehow also
roped in threats to dox Alex Jones because
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he talked about the controversy on his show
and called the guys pussies.
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This is apparently ground for being doxxed.
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Overall, it was a really ugly look.
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Fast forward to May.
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Weâve got a legal company sending a letter
to the company, accusing it of Code of Conduct
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violations, breach of contract, and defrauding
customers in order for company big wigs to
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line their own pockets, which has turned into
a class action lawsuit.
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Weâve also got an investigation, a second
lawsuit, and continually plummeting stocks
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all coming together over the last month.
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Now, investing websites are saying to avoid
the company because it is flat out unprofitable.
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By their reports, BRC only has $110 million
left on the books.
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According to Investorplace, if the company
keeps losing, it wonât have enough funds
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to last another year.
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The article attributes at least some of the
companyâs losses to the New York Times interview
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they did last year that drummed up a TON of
bad press in the conservative community.
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Less than one year after accusations of going
woke, it seems the company is, indeed, going
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broke.
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And the weirdest part?
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BRC is apparently trying to fix this byâŠproducing
Mexican rap videos.
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I don't really know why.
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So letâs take a closer look at all this.
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In November of last year, it was announced
that BRC would be going public.
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The company was doing this via a merger with
another company - a special purpose acquisition
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company, or SPAC, called SilverBox Engaged
Merger Corp.
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The acquisition was expected to turn Black
Rifle into a âunicornâ start-up valued
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over $1.7 billion, with stocks starting at
$10 a share.
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A couple weeks later, they released a satire
skit on their YouTube channel, featuring the
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guys in a gay military uniform fashion show,
with one of the guys in drag.
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I found it weird, but funny - mostly weird,
really, but there were a lot of folks who
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didnât like it and questioned how it was
supposed to sell coffee or support the second
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amendment.
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Some conservative YouTubers even called for
the company to be canceled over it.
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Dislikes on the video are no longer visible,
but, back when they were, it was ratioed.
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Hard.
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In February of this year, the company pulled
the trigger, going public and thanking itâs
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customers - LOL - for making it happen.
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The press release included some comments from
Hafer about wanting to support ethical veterans
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and creating positivity.
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And now, we get to the lawsuits.
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Thereâs two, with the possibility of a third,
and thereâs a lot of overlap on the timeline
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and a lot of moving parts.
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Like, enough that we need a flow chart.
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On May 4th, a securities firm named Hittelman
Strunk announced they were investigating the
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company for securities fraud claims on behalf
of some of the companyâs shareholders.
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A press release stated there were âallegations
that BRC Inc. breached their fiduciary duties
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by prioritizing their own interests when they
announced redemption of all outstanding public
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warrants before properly disclosing the effects
of shareholder dilution."
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The press release includes a timeline, stating
that on March 30th, the SEC proposed new rules
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for SPACs that WOULD require dilution disclosures.
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Five days later, on April 4th, BRC announced
theyâd be redeeming all public warrants,
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which basically means investors had been promised
stocks at a set price - in this case, $11.50
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a share - and now could cash in on that price,
which was about $20 lower than the Stock Exchange
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listing.
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From what I understand, this process is common
with start-ups because it increases the share
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count, but investors donât like it because
it dilutes their investment.
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But donât quote me on that, because Iâm
not a stock broker, or a cat.
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Hittelman's issue is that the company did
their dilution disclosure two weeks later.
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By that time, the stock had fallen almost
$11 a share, and because of that dilution,
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the stock got downgraded by a major investment
bank.
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Losses bring lawsuits, and the company behind
the investigation is now calling for folks
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to contact them to join a class action lawsuit.
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The next day, the firm spearheading the investigation
put out another press release, this time saying
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BRC filed to remove their stocks from the
public stock exchange before markets opened
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on May 4th, effectively stopping the public
from buying or selling shares, but allowed
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PRIVATE investors and insiders to sell their
tanking stocks after markets closed.
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The next day, they were back on public exchanges,
but the stocks were listed with another 20%
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loss.
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Since then, the stock has continued to fall,
and went from a high of $34 in April, to a
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low of $8.46 on May 24th.
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The stock has lost 70% of its value and the
company, while reporting an increase in earnings
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from last year, also reported a loss of nearly
$257 million on their May 12th earnings report.
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Yee-ouch.
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Enter lawsuit number one, filed at the end
of April.
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It was filed in New York federal court by
Tang Capital Partners LLC, and is charging
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BRC with breach of contract and securities
fraud.
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Part of the complaint reads,
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âBRCC improperly and unlawfully blocked
Tang Capitalâs repeated attempts to exercise
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its Warrants to buy BRCC shares for $11.50
per share and sell those shares at much higher
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prices.
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Indeed, in the weeks following Tang Capitalâs
initial attempt to exercise, BRCC stock rose
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to a high of $34.00 per share before falling
all the way back down to approximately $15.00
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per share as of the date of this Complaint.
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By blocking Tang Capitalâs attempts to exercise
its Warrants and sell the underlying shares
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at much higher prices and before the stock
declined, BRCC caused millions of dollars
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of damages to Tang Capital.â
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Theyâre seeking damages in the amount that
they would have made if the transactions hadnât
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been blocked.
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So that lawsuit was filed, then we got the
earnings call with the huge loss.
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BRC offered out another set of warrants to
try to pump some cash into the machine, and
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then the second lawsuit showed up.
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The newest lawsuit was filed by a different
company, an investment firm called 1791 Management,
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on the grounds of BRC harming both investors
and veterans.
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1791 manages the portfolio of at least one
major BRC stakeholder, and first tried to
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send a letter to the company, asking BRC to
come up with an action plan to address some
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of these issues, along with what they say
are violations of the Conflicts of Interest
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section of BRCâs own Code of Ethics.
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The letter sounds a little gimmicky, calling
Hafer one of the most dangerous CEOs in America,
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but also outlines an alleged plan by BRC insiders
to squeeze the stock in order to line their
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own pockets.
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According to the letter - which includes SEC
materials on the market manipulation BRC is
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accused of - BRCâs CFO has previously been
involved in a fraud lawsuit for manipulating
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stocks of ANOTHER company.
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So thatâs some extra sauce on this fish
sandwich.
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The letter also says that BRC neglected to
file necessary paperwork within a required
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timeframe, lied about it, and that Hafer awarded
himself over 4 million shares, making a collective
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$89 million dollars from stocks while the
company lost 4.8 billion in value.
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Which, yeah, doesn't sound great.
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A few days later, 1791 filed their lawsuit,
suing BRC for violations of securities law,
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breach of contract, breach of fiduciary duty,
negligent misrepresentation, and violation
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of California law, as the lawsuit was filed
in California.
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That part probably doesnât mean much, as
pretty much everything except pooping on the
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sidewalk is illegal in California, but we're
talking sprinkles on the shit sundae at this
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point.
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All that being said, is the tanking stock
proof of a nefarious plan?
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Not necessarily.
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It could just be the product of a bad economy
and BRC persistently making fun of its customers
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and shooting itself in the foot.
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It could also be, at least in part, to the
perception that they've gone woke - which,
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again, isn't helped by how they've talked
about their customers.
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Hafer has said he doesn't care if they lose
business over it, and I said back then they
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might care once it hits their wallets.
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Now, here we are, with the company allegedly
going broke - but then Hafer supposedly raking
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in millions.
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Coincidence?
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Maybe.
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Big master plan to defraud all the customers
they say they don't like anyway, and make
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millions of dollars while doing it?
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Also a possibility.
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There hasn't been been any update yet on the
Tang lawsuit, except that BRC apparently hasn't
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hired a lawyer?
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Kind of weird with this level of accusations.
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But the first hearing for the 1791 lawsuit
has been scheduled for October, so until then,
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we wonât really know how valid the claims
are or if thereâs really any meat on the
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bones of this investigation and lawsuit.
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Itâs entirely possible itâs just a disgruntled
shareholder, but itâs just as possible that
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BRC continues to dig themselves into some
deep shit.
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But hey, we have to admit, BRC puts out some
good videos, so at least that rapper will
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have some SWEET music videos.
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Either way, that's it for today's video, please
like, share, and subscribe if you're new here,
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and drop a comment down below for the algorithm.
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If you like this video and what I do here,
check out the description for all kinds of
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support options, including Patreon, Subscribestar,
and Paypal.
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As always, thanks for tuning in, stay safe,
and happy shooting.
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