Beer Stock Sales Frothy

How much beer can you drink? This isn’t an invitation to a chug-a-lug, it’s an investment question.

Shares of Pete’s Brewing Co., which sells trendy European-style beers such as “Pete’s Wicked Ale,” rose substantially in their first day of public trading. Out at $18 and trading as high as $27.25 its first day.

There was a precedent. In August, the stock of Seattle-based Redhook Ale Brewery Inc., another specialty brewer, jumped 59 percent to 27 the first day after its initial public offering. Redhook shares traded at $28 Friday.

Just wait until the king of the “microbrewers,” Boston Beer Co., goes public, which will be soon.

Investors who are bidding up these shares seem to recognize no limits for the companies behind them. Redhook shares, for example, are trading at about 60 times analysts’ estimates for the brewer’s earnings for 1995. Just like an Internet stock.

It’s possible that the small beer companies can grow fast for years. Pete, Redhook, Sam and the others would only have to steal a bit more from the big brewers each year to ring up impressive gains for themselves.

But with 700 specialty beer concerns in the market, competition will be stiff.