Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.

Bullboard - Stock Discussion Forum Big Rock Brewery Inc T.BR

Alternate Symbol(s):  BRBMF

Big Rock Brewery Inc. is a regional producer of premium, all-natural craft beers, ciders and other alcoholic and non-alcoholic products, which are sold in six provinces and two territories in Canada. Its segments include wholesale and retail. The wholesale segment manufactures and distributes beer, cider, and other alcoholic and non-alcoholic beverages to and through provincial liquor boards... see more

TSX:BR - Post Discussion

Big Rock Brewery Inc > economics vs strategy
View:
Post by TheCount11 on Nov 22, 2022 8:57am

economics vs strategy

Its pretty hard for business strategy to beat economics. 

What is the demand vs supply? 
Big breweries were demand aggregators.  They still largely are.  Bud light, Coors light, Corona, Heineken are all easy drinking beers which is the most popular style.  

While the majority of customers prefer easy drinking beers there are some that prefer a beer with more body and taste.  Craft brewers were able to satisfy these customers.  The question I always ask myself is how big is this market?  Its always a quess.  When management focuses on growth I ask myself that question every quarter.  How big is the market?  At one point will the company try and grow by any means possible? 

Will they invest in property, plant and equipment in an over supplied market?  Easy drinking beer?  Contract brewing?

Big Rock is like a boat that went full steam into an iceberg.  Once the ship was taking on water and the board many miles away from the catastrophy got the telegram from the bank they fired the captain.

The board told the ship owners that it is going to sink if they don't get more money to repair it.

At this point fixing the hole in the balance sheet takes care the bank first.  If Big Rock does not raise *enough* equity it won't do much for shareholders.  Given they lose around 1 million dollars a quarter raising anything less than 5 million dollars won't help much. 

There are roughly 7M shares outstanding and current market cap is roughly $9 million.

At same time risk free investment like a 18 month GIC at BMO is 4.75%.  Not going to be easy raising 5 million to fund a money losing brewery without a CEO when GICs are paying around 5%.
Comment by GoodMonkey on Nov 23, 2022 10:24am
Big Rock has assets worth approximately 56M  Total debt 26M So they are currently trading at about 25% of net worth.  Share price has been pushed down 75% this year on very low volume. On November 21 it went down 27% with only 10K traded on the TSX exchange.  Insiders haven't sold any significant amount of shares recently. They must be confident that BR will get the house in ...more  
Comment by TheCount11 on Dec 02, 2022 8:07am
Who is going to step up to buy a share block thats a non controlling interest in a money losing Brewery that over invested in regional capacity? In June '21 Big Rock closed its Etobicoke brewery and tasting room. How much did they get for a new turnkey brewery located in the biggest market in Canada?  $2.1 Million.  There was a $1.5 million writedown.  This was not a ...more  
The Market Update
{{currentVideo.title}} {{currentVideo.relativeTime}}
< Previous bulletin
Next bulletin >

At the Bell logo
A daily snapshot of everything
from market open to close.

{{currentVideo.companyName}}
{{currentVideo.intervieweeName}}{{currentVideo.intervieweeTitle}}
< Previous
Next >
Dealroom for high-potential pre-IPO opportunities