preview

Shake Shack IPO Case Study

Decent Essays

The article I chose for the assignment is about the Shake Shack IPO (Initial Public Offering) and the environment in which is was released. The restaurant’s stock launch was a major success, as the price per share skyrocketed at a growth of 119% from $21 to $45.90, in one day of trading. With the intense growth that Shake Shack experienced, the chain of 63 restaurants was valued at $1.6 billion, which had investors pouring in. While it was expected for Shake Shack to be a success on the launch of their IPO, their valuation and continued growth has shown the shift in the market of restaurants. Society has moved from the fast food era, to a new adaptation, “fast-casual”. Restaurants such as Noodles, Chipotle, Garbanzo, and many others have capitalized on the shift from value to quality based desires. …show more content…

With the number of burger restaurants growing at 10 times the average rate from 2008-2013, the market has become vast. That being said, because Shake Shack has established itself as a power player in the market, the chain doesn’t have to worry about stealing market share from the fast food chains. The pull of a better dining experience, higher quality, offering beer/wine, and while still maintaining prices similar to the fast food chains, Shack Shake has been able to grow not only in the investing field, but also expanding their customer base. Due to the success of the “boutique burger shops” fast food chains are scrambling to compete, with Carl’s Jr. coming out with antibiotic free burgers, and McDonald’s trying create a premium menu with higher quality

Get Access