Shake Shack IPO: Shares rocket 130 percent in market debut
Shake Shack stock spiked more than 130 percent in its trading debut Friday after pricing at $21 per share. Restaurateur Danny Meyer started Shake Shack, which debuted under the ticker symbol 'SHAK,' in 2001 out of a hot dog cart in a New York City park.
Shake Shack founder Danny Meyer (3rd R) and Shake Shack CEO Randy Garutti (2nd R) ring the opening bell at the New York Stock Exchange to celebrate their company's IPO January 30, 2015. Shares of gourmet hamburger chain Shake Shack Inc soared 130 percent in their first few minutes of trading on Friday, valuing the company that grew out of a hotdog cart in New York's Madison Square Park at nearly $2 billion.
Brendan McDermid/Reuters/File
Hamburger chain Shake Shack spiked more than 130 percent in its trading debut Friday after pricing at $21 a share.
The company is trading under the ticker symbol "SHAK" on the New York Stock Exchange. It opened at $47 per share.
Restaurateur Danny Meyer started Shake Shack in 2001 out of a hot dog cart in a New York City park.
"We didn't have any dreams that today would ever come," he told CNBC after the stock priced. "We wanted to open a hot dog cart to help a park in Madison Square Park. And when you put a great product together with amazing people with the kind of heart that you have felt here on the floor, these people are doing it, and it's our staff that this day is for."
The chain has 63 locations within the U.S. and internationally. In the year ended Dec. 25, 2013, Shake Shack's revenue totaled $82.5 million, a $25 million revenue gain since the 2012 fiscal year, according to an SEC filing.
Shake Shack founder Danny Meyer rings a ceremonial bell during the company's IPO on the floor of the New York Stock Exchange January 30, 2015.
Friday's trading values Shake Shack at more than $1 billion.
Asked whether the valuation put considerable pressure on the chain, Meyer said, "We cook one burger at a time with one smile at a time, and I don't know how you value that."
While sales at comparable stores have slowed, future growth will come from restaurant expansion, Randy Garutti, Shake Shack CEO, told "Squawk on the Street." He said the company has just gotten started and it will be a growth story for years to come.
"There's a seismic shift in how people are eating today. People are trading up from [quick serve restaurants]," he said. "I know my kids and my kids' generation, they're not eating fast food. They want more. They expect more."
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