Initially expected at $14-16 per share, offering priced up significantly this evening, and number of shares increased from 5M to 5.75M.
WASHINGTON, January 29, 2015 – Several reliable sources reported Thursday evening that fashionable high-end fast-food chain Shake Shack has just priced shares of its hot IPO at $21 per share.
The initial price range for the newly issued stock was indicated at $14-16 per share, but the expected range was moved up earlier this week to $17-19 per share.
Demand for the shares, however, clearly outstripped supply and underwriters have formally priced the offering up another $2 from the top of its previously expected range. In addition, the underwriters boosted the number of shares on the offer from 5 million to 5.75 million Class A shares.
From time to time, however, aggressive pricing by the underwriters leads to failure, with the most notorious recent example being Facebook’s (FB) debacle of an opening on NASDAQ. Subsequent to the initial pop, FB sank like a rock over the next month and even those who got in on the issue suffered significant early losses.
Friday’s action in the new SHAK shares should give a fair indication as to where the shares will be heading over the next calendar quarter.
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