Don’t Shake Off Shake Shack

Starting as just another hot dog stand on Madison Square Park, the fast and casual restaurant, Shake Shack, is taking its first steps to becoming a global company, as it is now listed on the New York Stock Exchange. Ever since its humble beginnings, Shake Shack has grown substantially, currently owning 63 outlets in the United States and international cities. As if this was not enough growth, it was announced that Shake Shack had filed to sell shares to the public. And just like the hungry customers who wait hours on a line for a burger and crinkle cut fries, investors showed just as much eagerness for the company’s stock.

Shake Shack more than doubled their initial price offering of $21 on the first day— further showing its immense popularity. At the close of the market, Shake Shack (SHAK) closed at $45.90. This valued Shake Shack as an almost $1.7 billion company.

Shake Shack (SHAK) 's intraday chart of the first day on the market.
Shake Shack (SHAK) ‘s intraday chart of the first day on the market.

Shake Shack’s success is largely paradoxical however, considering its pricey food and inaccessibility for most Americans. Yet this is the exact reason why Shake Shack has gotten investors so excited, and McDonald’s fearful.

Unlike McDonald’s, the Shack has never suffered a “pink slime” moment. The fast and casual restaurant prides itself on being the “anti-McDonald’s” type. It vows to only use premium beef for its flattop grilled burgers and attracts customers with promises of fresh, premium ingredients, like home-spun shakes. In addition, it has not suffered from a menu bloat— it maintains a core menu that has evolved little from the old-style stand it once was.

Whether it be a burger at Shake Shack or McDonald’s, America’s burger business will still continue to strike gold. And gratefully,  it doesn’t seem like consumers nor investors will get tired of burgers anytime soon.


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