(MENAFN- ProactiveInvestors) Shake Shack (NYSE:SHAK) the little New York burger joint that began 14 years ago in a hot-dog cart more than doubled in its first day of trading on the New York Stock Exchange after raising $105 million in an initial public offering.
The share were up 128 percent at $47.95 at 3:17 p.m. valuing the company at $1.70 billion after hitting a high of $52.50.
The company owned by restauranteur Danny Meyer raised its IPO price range from $14 to $16 earlier this week. The stock trades under the symbol SHAK.
The company is offering a dual-class share structure with the Class A stock issued in the IPO representing 44.5 percent of the economic stake and 14.1 percent of voting power.
Current stockholders will own through Class A stock 55.5 percent of economic interest and 17.6 percent of voting. The Class B shares held by those investors will account for the remaining 68.3 percent of voting power.
. and managed the offering.
Shake Shack’s road to stock-market darling began modestly. It opened in 2001 as a kiosk to help support the restoration of Manhattan’s Madison Square . The first official Shake Shack was born three years later and it wasn’t until 2008 that the company started expanding. It now has 63 stores from Chicago to Dubai which sell burgers fries and frozen custard. The chain adds 10 domestic restaurants per year.
Shake Shack said it could eventually grow to at least 450 U.S. locations.
Shake Shack had net income of $3.6 million and revenue of $83.8 million in the 39 weeks to September 24. Revenue jumped 41 percent in that time boosted by consumers turning away from traditional fast food. The company is trading at a price-to-earnings ratio of about 325 with each restaurant valued at about $27 million.
Shake Shack’s debut comes two days after a CEO change at McDonald’s Corp. () which is mired in its worst U.S. sales slump in more than a decade. The decline has been blamed in part on fast-casual restaurants like Shake Shack that are winning younger consumers with fresher and more customized offerings.
The IPO market has been fruitful for "fast-casual" restaurant operators hoping to replicate the scorching growth of Chipotle which had roughly 1700 U.S. restaurants at last count. Its shares listed at $22 in 2006 were trading at $713 today.
Mall-based chain Red Robin Gourmet Burgers is up more than 300 percent in the last five years and Zoe's Kitchen has climbed to about $32 per share after opening last April at $25.65. Its IPO price was $15 per share.
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