⚡ Get All Content for 20% Off ⚡

This Burger Chain's Share Price Doubled in Its First Day After IPO It's the most successful debut by a fast casual restaurant chain in the United States this year.

By Reuters

entrepreneur daily

This story originally appeared on Reuters

Reuters | The Habit Burger Grill
The Habit Burger Grill Restaurant

Shares of Habit Restaurants Inc, known for its charburgers, doubled in their first day of trading, making it the most successful debut by a fast casual restaurant chain in the United States this year.

The stock opened at $30 and shot up to $36, double its IPO price of $18, within five minutes of trading on the Nasdaq.

Habit provides calorie count and nutritional information of its products, much like Zoe's Kitchen Inc, whose stock shot up 74 percent in their debut in April.

The popularity of such fast casual chains underscores consumer's preference for healthier food and investors have shown a healthy appetite for such stocks.

Zoe's shares have more than doubled since their debut, while El Pollo Loco Holdings Inc's are near that mark. J. Alexander's Holdings Inc has filed for an IPO, while Shake Shack is reported to have picked banks for a proposed offering.

"People are moving from fast food to specialty restaurants," said Joseph Schuster, founder of IPO research firm IPOX Schuster LLC.

"It's a long-term structural trend and some of these specialty IPOs fit that niche very well and there is strong underpinning demand for these deals."

Sales in the U.S. fast casual industry rose 11.3 percent to $34.5 billion in 2013 and are expected to exceed $50 billion by 2018, according to research firm Technomic.

Habit Restaurants' revenue rose 43 percent to $120.4 million in 2013, while net income nearly doubled to $5.8 million.

Habit Restaurants has expanded rapidly in the past five years, going from 26 restaurants at the end of 2009 to 99 as of October. But its presence is limited to four U.S. states including California.

Habit plans to double the number of restaurants in next four years, it said in its IPO filing.

Founded in Southern California by two brothers in 1969, the same year that burger chain Wendy's was founded, Habit was acquired by investment firm KarpReilly LLC in 2007.

Shares of the company were up 93 percent at $34.71, making it the top percentage gainer on the Nasdaq. At their session high, the company was valued at about $909 million.

Piper Jaffray, Baird and Wells Fargo were among the underwriters to the IPO.

(Reporting by Neha Dimri in Bangalore; Editing by Savio D'Souza)

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Business Ideas

55 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.