Blog: Regulator slams door on duo's tilt at Pabst Brewing Co
Chris Mercer | 9 June 2011
The US Securities and Exchange Commission has snuffed out an attempt by two friends to raise funds to acquire Pabst Brewing Co.
Was this an idea that should have died when the bar shut at 2am? We've all had those beer-fuelled, 'what-an-idea, what's-stopping-us' moments.
Well, it turns out that the thing stopping Michael Migliozzi II and Brian William Flatow is the Securities & Exchange Commission (SEC). Now, there's an organisation that you don't want breathing down your neck.
The pair set up a website in 2009, bluntly named buyabeercompany.com (since disabled), in order to garner financial pledges for a planned US$300m takeover of Pabst Brewing Company.
Pabst is one of the oldest beer firms in the US and was last year bought by private investment fund Metropoulos & Co for an undisclosed fee.
"Would-be investors visiting the website were told that each investor would receive a certificate of ownership as well as beer of a value equal to the amount invested," the SEC said yesterday (8 June).
Hang on: handing out the product as an immediate dividend to shareholders? It's not a foolproof business model, is it?
Saying that, by February 2010, the SEC said that the two men had already received $200m in pledges from around 5m people. That's an average pledge of $40. I can think of several easier and quicker ways to get $40-worth of beer.
No money changed hands, said the SEC, which found the pair guilty of violating federal securities laws. Essentially, they did not register with SEC and did not disclose enough information to potential investors.
Back to the bar, then.
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