While future generations of historians will almost surely define this decade as the one blighted by the COVID-19 crisis, against a sociological framework, the new normal represents an epidemic within an epidemic. Startled by the almost immediate paradigm shift that the SARS-CoV-2 virus imposed, millions of Americans sought to exercise the one Constitutional freedom that suddenly appeared most relevant: the right to bear arms.
According to data from the Federal Bureau of Investigation (FBI), in 2019, weapons retailers facilitated background checks on approximately 28.4 million firearms-related transactions. By the end of 2020, this figure ballooned to an all-time recorded high of 39.7 million transactions, a whopping 40% increase. What’s more, rising acclimatization to post-COVID realities did little to sate the newfound appetite for civilian-accessible munitions, with 2021’s firearms transactions numbering just under 39 million.
Perhaps the greatest irony of the pandemic is that while it accelerated political and inter-community divisiveness, the crisis also served to cement one of the most controversial hallmarks of American exceptionalism: the unparalleled proliferation of the firearm. Indeed, a 2015 article from The Washington Post lamented that there were now more guns than people in the U.S.
Bluntly, these weapons are here to stay. Therefore, people must learn — ironically enough — to live with firearms, which cynically but necessarily augurs well for American Rebel Holdings Inc.
What is American Rebel?
According to documents filed with the U.S. Securities and Exchange Commission (SEC), American Rebel bills itself “primarily as a marketer and designer of branded safes and personal security and self-defense products. Additionally, the company designs and produces branded apparel and accessories.” Notably, American Rebel mostly relies on U.S.-made steel to construct its safes, which in addition to storing firearms also protect customers’ “priceless keepsakes, family heirlooms and treasured memories.”
Per the company’s prospectus dated Jan. 18, 2022, management revealed that demand for its safes is growing moderately across all segments of its customer base. With COVID-19 sparking greater interest in not only personal health but also protection from criminal elements, some speculators anticipate expansionary opportunities in the years ahead.
When is the American Rebel IPO Date?
Batting leadoff for the month of February, American Rebel separates itself from the typical initial public offering (IPO) in that it’s not technically a public market debut. Since 2015, the gun-safe manufacturer’s equity shares have been traded on the over-the-counter (OTC) market. Therefore, rather than a true IPO, the proceedings represent an uplisting, in this case to the Nasdaq exchange.
Aside from certain technical details, however, American Rebel is nearly identical to a traditional market debut. Under the terms of the deal, the company will offer 2.69 million units, with each unit composed of one share of common stock and one warrant to purchase one share, exercisable at $5.81. Management anticipates a public offering price between $4.15 and $5.15 per unit.
All told, American Rebel aims to raise $20 million in the offering. The company’s common stock and warrant will trade under the ticker symbols AREB and AREBW, respectively. EF Hutton, a division of Benchmark Investments LLC, represents the sole bookrunning manager.
An intriguing listing (albeit one that’s incredibly risky due to the diminutive capitalization involved), the timing of AREB stock into the IPO calendar presents a double-edged sword. On one side of the blade, fear has consistently proven to be a powerful motivator, thus driving millions of Americans who otherwise may not have purchased a gun in the pre-pandemic era to arm themselves ahead of a major catastrophe.
Of course, the mere presence of projectile weapons in the house activates the non-zero probability of a potentially fatal mishap. Beyond that extreme, various state laws may require firearms owners to secure access against minors lest they be held criminally liable for incidents involving accidental discharge. Therefore, American Rebel stands ready to advantage a suddenly expanded market.
But on the other side, investor sentiment for high-risk, high-reward ideas like AREB stock may be waning. For starters, last month was a rough one — and if you believe in the January Barometer theory, the rest of 2022 could be due for unwanted volatility.
At this juncture, though, such musings carry greater weight from high levels of stock trading on margin. With a near-record number of investors still borrowing funds to speculate on the market, financial stability sits at the mercy of a hair trigger — just like in the years leading up to the Great Depression.
American Rebel Financial History
Although a controversial industry for patently obvious reasons, the U.S. firearms industry nevertheless plays a key role in the economy, employing tens of thousands of people. Just like the possibility of COVID-19 becoming endemic and thereby forcing Americans to permanently accept some elements of the new normal, society must also come to grips with retail munitions.
Politically, it’s anathema for any politician — Democrat, Republican or independent — to deny the exercising of the Second Amendment. Therefore, AREB stock should enjoy continued relevance, particularly as the underlying potential user base dramatically increased.
Moreover, American Rebel is technically not exclusively limited to the North American market. According to Mordor Intelligence, the global sports gun market commanded a valuation of $6.24 billion in 2020, and experts project that this segment will expand at a compound annual growth rate (CAGR) of 6.38% between 2021 through 2026.
While several financial avenues are available for American Rebel, so far, fiscal performances have presented a mixed bag for prospective investors. For instance, in the quarter ending Sept. 30, 2021, the company generated revenue of $295,490, an increase of nearly 6% from the year-ago level. Since weapons retailers sold more firearms in 2020 than in 2021, the sales bump for American Rebel suggests heightened awareness — even among new gun owners — of safety products.
Nevertheless, net loss for Q3 2021 came out to $1.43 million, higher than the $1.32 million net loss in the year-ago period. Over the first three quarters of last year, American Rebel suffered a net loss of nearly $4.9 million, only buttressed by a relatively miniscule gross revenue of $848,000.
Frankly, management must start reversing these figures soon or investors will likely lose interest.
American Rebel Potential
Peruse great stories in the annals of U.S. history and more often than not, you’ll notice that the firearm is never too far behind. In fact, this country wouldn’t exist were it not for brave colonists rising up against their overlords. As such, American gun culture and these three catalysts may support AREB stock:
- Politics: Some evidence indicates that Democrats are counterintuitively the best tailwinds for the firearms industry due to anxieties over future restrictive gun-control policies.
- Safety: According to Everytown Research & Policy, the “period from March to December 2020 saw a 31 percent increase over the same months in 2019 in unintentional shooting deaths by children.” Simply, more guns equates to more chances for tragic mishaps.
- Fear: While the lockdowns and mitigation efforts that COVID-19 imposed saw a reduction in several crime categories, data shows that homicides and aggravated assaults increased during the first half of 2021 as compared to the year-ago period.
Although the circumstances following the initial onslaught of the COVID-19 pandemic offer cynical potential benefits for AREB stock, the main concern for prospective buyers is American Rebel’s track record. Ultimately, investments are judged on performance, not narratives, so management has its work cut out for it.
How to Buy American Rebel IPO (AREB) Stock
Those interested in AREB must acquire shares at the open, necessitating knowing how to buy stocks.
Step 1: Pick a brokerage.
With the best brokers competing on similar incentives, focus your efforts on finding a platform that holistically fits your needs.
Step 2: Decide how many shares you want.
IPOs are risky, especially the smaller-cap variety. Therefore, choose a balanced share count to mitigate the dangers.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
AREB Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
Unfortunately, no pre-IPO opportunity is available for AREB stock.
A Half-Cocked Uplisting
With the initial fears of the COVID-19 crisis triggering explosive demand for firearms, greater interest in gun safety and storage organically materialized, boosting American Rebel’s business. However, the company must accelerate its revenue channels if it intends for AREB stock to stay in the Nasdaq’s good graces.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.