Shares of Shake Shack closed nearly 119% higher than the initial public offering price on Friday.
Image: courtesy of Shake Shack
The initial price on 5,000,000 shares of Class A common stock at a public offering price was $21.00 per share but demand pushed the stock to $49.77, finally closing on Friday’s trading at $45.58.
Though analysts are saying that Shake Shack is overweight, the ‘fast-casual’ eatery was in huge demand on Friday at the latest New York Stock Exchange IPO. What started as a burger stall in Manhattan Park has since grown to group of 63 stores located in New York, New Jersey, Washington, D.C., Connecticut, Georgia, Illinois, Pennsylvania, Florida, Massachusetts, Virginia, and Nevada, and international licensed Shacks in London, Istanbul, Dubai. Shake Shack has seen impressive growth and now has an almost cult following. In Manhattan the average store makes $7.4 million in sales annually, whilst sales from other outlets average $3.8 million. Consumers are mainly the business elite.
CEO Danny Meyer is the brains behind the burgers and with a little help from his financial and media contacts, he launched his IPO to great acclaim. After IPO, Meyer is now worth an additional $342 million due to his 21% stake in Shake Shack.
The future of Shake Shack will see another 10 outlets added to the chain per year but comments on the stock valuation such as ‘unsustainable’ and ‘decreasing margins’ may see Shake Shack going the same way as many other IPOs that have fallen after the first day of trading.
Shake Shack now appears on STOCK.com MT4 platform where the first day’s trading and demand for the IPO is apparent.
MT4 chart: Shake Shack
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