Organic
burger chain Shake Shack had the New York stock exchange cooking on its first
day of trading on Friday, leaping 129.7 percent from its IPO. The
"all-natural" fast food trend is the latest fad among US investors.
Deutsche Welle, 30 Jan 2015
The
hamburger chain that prides itself on fresh ingredients and good service raised
$105 million (93 million euros) selling 5 million shares at $21 per share.
That was a
huge hike on its initial forecast, which said its shares would fetch $14 to $16
per share from investors, and raised that forecast to $17 to $19 per share on
Wednesday as demand grew.
Shares then
leapt to $27.40 on Friday before climbing even further to $48.40 in the
afternoon. Analysts estimated the company could have sold its stock for a
higher price in its IPO and raised more money.
Trading up
with natural ingredients
The burger
chain, created by restaurateur Danny Meyer's Union Square Hospitality Group,
started life as a humble New York City hot dog cart. Now it is considered the
latest in the trend of "fast-casual" chains that sell fresh
ingredients, and has investors' mouths watering.
The firm
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.
Shake
Shack, whose motto is "Stand for Something Good," cooks its burgers
to order using hormone- and antibiotic-free beef.
It has been
compared to the fast-growing burrito chain, Chipotle Mexican Grill, which also
emphasizes food customization, high-quality ingredients, and the use of natural
meats.
"There's
a seismic shift in how people are eating today. People are trading up,"
Shake Shack chief executive Randy Garutti told US news network CNBC.
"They're not eating fast food. They want more. They expect more."
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