If you’re anything like me, you are currently sitting fireside at your favorite red leather chair in your estate’s least formal study, heating a snifter of cognac over candlelight while reading the ticker tape on all the latest coffee stock market news. “Joe Everyman” all my friends over at the NYSE call me. Why, even the sapphire-encrusted Chemex collar I had custom made is blue.
And as I’m sure many of you fine fellow Joe Everypeople already know, but there is quite a bit of buzz on the various trading floors. But for those who may have missed the coffee news—oh how easy it is to lost the time practicing the violin while staring wistfully out the bay window overlooking the freshly-manicured garden—I have collated and compiled all the most recent transactions to help you filter your coffee portfolio. A portafilter I call it. Hopefully this will help provide a modest increase in your net worth, at least enough to purchase that new summer home you’ve been eyeing.
JDE Peet’s Eyeing a $2.5 Billion IPO
First some good news. JDE Peet’s, the coffee conglomerate containing brands like Douwe Egberts, Peet’s, Maxwell House, Gevalia, Stumptown, and Intelligentsia, is poised to make a big splash as potentially the year’s largest IPO when it begins trading on Euronext Amsterdam on June 3rd. According to Reuters, the stock is expected to range from €30 to €32.25 per share, giving the “world's No. 2 packaged coffee maker” a valuation of €16 billion ($17.5 billion).
Per Reuters, demand for JDE Peet’s is already with, with “books [being] covered in excess of the full offer size within hours of opening” including that of (my croquet partner) George Soros’ Quantum Partners. Acorn Holdings, JDE Peet’s “major shareholder” controlled by JAB Holding Co, is said to be selling off up to 25.8 million of their shares as well, with the total IPO expected to raise $2.5 billion.
Luckin Coffee Under Threat of Being Delisted
Turns out some unicorns don’t actually exist. Luckin Coffee, the Chinese coffee startup that came out of nowhere to challenge—and arguably defeat—Starbucks in its home country, is not looking so hot right now. Per Shine, after a six-week suspension from being traded on the Nasdaq for financial fraud—the company fabricated $310 million worth of transactions—Luckin’s shares dropped by as much as 45% on the first day of trading. With stocks once selling $50 a share back in January, “Shares at the closing bell on Friday were trading at $1.39.”
And now, Luckin may be removed from the Nasdaq entirely. On Tuesday, May 19th, one day before trading was set to resume, the Xiamen-based coffee company received notice that the Nasdaq was making a delisting recommendation, which would remove the company from being traded. Luckin has appealed the recommendation, and a hearing is expected to take place in the next 30 to 45 days to settle the matter.
Kopi Kenanagan Makes a Move
When one Asian coffee titan falls, another rises. The new entrant is Kopi Kenangan, a fast-rising Indonesian coffee chain that just raised $109 million in series B funding, according to Forbes. And while that number itself is impressive, the funding was led by Sequoia India, “the famed venture capital known to breed unicorns.”
Cut from the same cloth as Luckin—a tech savvy, on-demand, app-based coffee ordering brand with smaller retail storefronts—Kopi Kenanagan has gone from 30 stores in 2018 to 324 today with a current valuation at $477 million. But the company doesn’t plan on stopping there. Much like Luckin did in China, Kopi Kenanagan is taking an aggressive growth strategy to unseat Starbucks as the largest coffee chain in Indonesia; they plan on opening one new store a day until they reach 500 at the end of the year, eclipsing the 400 storefronts Starbucks currently has in the country.
And don’t just take investment advice from me. Listen to my dear friends Jay-Z and Serena Williams, both of whom have invested in Kopi Kenanagan.
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