Burger chain Shake Shack sizzles in Wall Street debut31 january 2015, 16:27
Shake Shack, a hamburger chain that prides itself on fresh ingredients and good service, soared Friday in its first day of trade on Wall Street, AFP reports.
Near 1740 GMT, shares of the restaurant chain were at $48.24 on the New York Stock Exchange, up 129.7 percent from its initial public offering (IPO) price of $21. Shares got as high as $52.50 earlier in the session.
The chain, part of a rising wave of so-called "fast-casual" restaurants, sells "a classic American menu of premium burgers, hot dogs, crinkle-cut fries, shakes, frozen custard, beer and wine," it said in a securities filing.
The company's motto is "Stand for Something Good" and it touts its use of hormone- and antibiotic-free meat and fresh ingredients.
It has been compared to the fast-growing burrito chain, Chipotle Mexican Grill, whose motto is "Food with Integrity." Chipotle also emphasizes food customization, high-quality ingredients and the use of meats not raised on antibiotics and hormones.
"There's a seismic shift in how people are eating today. People are trading up," Shake Shack chief executive Randy Garutti told CNBC.
"They're not eating fast food. They want more. They expect more."
The growth of Shake Shack and of comparable chains that have successful IPOs comes amid a slump of iconic US fast-food chain McDonald's, which unexpectedly this week announced it would change chief executives amid falling sales.
Shake Shack plans to add at least 10 new US locations per year and to license the brand overseas. It currently has 63 locations globally, 31 in the US with most overseas sites in the Middle East.
Danny Meyer, a successful New York restaurateur, started the company from a hot-dog cart in New York City in 2001.
The company had $3.6 million in earnings through the first three quarters of 2014, down 19.9 percent from the year-earlier period. Revenues rose 39.1 percent over this stretch to $83.8 million, according to a filing.
Shake Shack raised $105 million in its IPO. With Friday's surge, the company is currently valued at more than $1.7 billion. It trades under the ticker "SHAK."