The latest fast-food restaurant IPO causing investors to lick their lips is burger chain Habit Restaurants, whose shares soared more than doubled in their Thursday debut.
The Irvine, Calif.-based burger chain posted huge gains in its first day of trading on Nasdaq as Habit's shares jumped nearly 120% to finish at $39.54. Habit priced its shares at $18 apiece Wednesday night, exceeding the $16 ceiling the company had previously predicted.
The transaction raised at least $90 million.
The Habit Burger Grill — whose burgers rank among the best offered by U.S. chains — was founded in 1969 and now has more than 100 locations in Arizona, California, New Jersey and Utah.
Habit, which trades under the ticker "HABT," is one of several entrants in the trend of "better burger" restaurants, such as the popular Shake Shack and Five Guys chains, that have been taking a bite out of sales at the expense of larger fast-food chains such as McDonald's and Burger King. (Shake Shack has tantalized investors with reports of a potential $1 billion IPO that could take place in the near future.)
The chain is also the most recent hot dish from the fast-casual restaurant scene to cause a stir on Wall Street. Investors intent on gobbling up the next Chipotle (cmg), which has seen its share price jump by almost 25% since the start of the year, gave a very warm welcome to fellow fast-casual chains El Pollo Loco (loco) and Zoe's Kitchen (zoes) in their own market debuts earlier this year.
Five restaurant operators have debuted on the market this year, raising a combined $486 million, including Habit, according to Reuters. Last year, two restaurants totaled half that amount.
Of course, a hot market premiere can give way to soggy returns down the road for some restaurant stocks. El Pollo Loco got off to a flying start in July, but its stock has come back down to earth a bit recently, dropping more than 18% in the past month. Potbelly (pbpb) is another cautionary tale: The sandwich-maker saw its stock more than double when the company went public last fall, but its shares have fallen by nearly half since the beginning of this year.