Shake Shack’s Shares Could Hint at Overvaluation

Shake Shack's stock is now trading at more than four times its I.P.O. price.

A once-humble New York hot-dog stand may have just turned into the ultimate market indicator. Shake Shack, which went public in January, hit a record high share price on Thursday, implausibly raising the value of the chain, a creation of Danny Meyer, by $250 million, to $3.3 billion.

The proximate cause was a revelation that the company had filed an application to trademark “Chicken Shack” outlets selling poultry-based fare. Logic would suggest that such a conventional menu item might already have been baked (or fried or roasted) into the valuation of a glorified burger chain like Shake Shack. Investing can be illogical, though.

Believers have kept the faith in the company’s shares. After they were priced at $21 apiece in the initial public offering, they rocketed up to $45.90 on the first day of trading. They’ve almost doubled again.

Mr. Meyer’s restaurants, also backed by the private equity firm Leonard Green & Partners, went public proclaiming measures like a set of “Shack-onomics” and “same Shack sales,” a measure to track revenue at outlets open more than two years. The cutesiness helped offset the fact that even the original I.P.O. price was no bargain. After the suggestion that it was moving to include chicken, Shake Shack’s estimated 2016 earnings now fetch a valuation multiple of 550 times.

The bullish mentality on beef and now ostensibly chicken is disconcerting. Financial prognosticators keep looking for signs of trouble in the runaway metrics of a bubble. Instead of worrying about wearables, they might do better to scrutinize edibles.

In Other News

fake money

Keywords clouds text link 

Dịch vụ seo, Dịch vụ seo nhanh , Thiết kế website ,  máy sấy   thịt bò mỹ  thành lập doanh nghiệp
Visunhomegương trang trí  nội thất  cửa kính cường lực  Vinhomes Grand Park  lắp camera Song Phát thiết kế nhà

Our PBN System:  thiết kế nhà xưởng thiết kế nội thất thiết kế nhà tem chống giả ban nhạ  ốp lưngGiường ngủ triệu gia  Ku bet ku casino buy fake money máy sấy buồn sấy lạnh

mặt nạ  mặt nạ ngủ  Mặt nạ môi mặt nạ bùn mặt nạ kem mặt nạ bột mặt nạ tẩy tế bào chết  mặt nạ đất sét mặt nạ giấy mặt nạ dưỡng mặt nạ đắp mặt  mặt nạ trị mụn
mặt nạ tế bào gốc mặt nạ trị nám tem chống giả  công ty tổ chức sự kiện tổ chức sự kiện
Ku bet ku casino
Sâm tươi hàn quốc trần thạch cao trần thạch cao đẹp

suất ăn công nghiệpcung cấp suất ăn công nghiệp

© 2020 US News. All Rights Reserved.