Shake Shack IPO prices far above expected range
By Lisa Baertlein and Avik Das
(Reuters) - Growth-hungry investors snapped up shares offered by Shake Shack Inc (SHAK.N: Quote), setting the stage for a sizzling debut for the New York-based burger chain when its stock starts trading on Friday.
Shares of the company, which has won a cult following for its rich milkshakes and hormone- and antibiotic-free burgers, priced at $21 each, an underwriter said, valuing the chain that started as a hotdog cart in a park at about $745 million.
Shake Shack raised $105 million from the initial public offering of 5 million shares.
Underwriters had set an expected price range of $17-19 per share, raised from an initial $14-$16 due to strong demand.
The IPO market has been particularly fruitful recently for so-called fast-casual restaurant operators hoping to replicate the scorching growth of Chipotle Mexican Grill Inc (CMG.N: Quote).
Shares of Habit Restaurants Inc (HABT.O: Quote), another gourmet burger chain, have risen more than 80 percent since their market debut two months ago.
Customers in Manhattan and Chicago often wait in long lines to get into Shake Shack's restaurants.
"It's a cult," said Bob Goldin, an executive vice president at consulting firm Technomic. Continued...