Wall Street is hungry for fancy salads.
Sweetgreen’s stock nearly doubled in price mid-day Thursday, hours after the upscale salad chain made its Wall Street debut.
The company set its price at $28 per share Wednesday, ahead of its initial public offering Thursday. The stock price jumped to about $54 at one point, and was hovering around $52 per share in afternoon trading.
The salad chain, which opened in 2007 and today has 140 restaurants, has a goal of serving “healthy food at scale,” according to an SEC filing related to its IPO.
Sweetgreen customers can build their own salad or choose from a selection of pre-set menu items, which also include warm bowls. The meals are expensive, with some salads priced at about $15 before any additions or sides.
A Sweetgreen salad might be the perfect meal for office workers who want to eat healthy and aren’t too concerned about spending. But with the future of office work unknown, it’s a precarious time to bet on the appetites of those customers.
“It is uncertain whether workers will return to offices in urban centers on a consistent basis, and even if they do, whether they will have a more flexible work schedule, which could reduce our revenues at our urban locations,” the company wrote in the SEC filing.
“If the shift toward remote work continues even after the COVID-19 pandemic has ended and workers do not return to offices in urban centers, or work from those locations less frequently, our business, financial condition, and results of operations could be adversely affected,” the company said.
Some were skeptical of the chain’s business model ahead of the IPO. David Trainer, CEO of investment research firm New Constructs, wrote in a note this week that competition in the space is stiff, and that Sweetgreen hasn’t done a great job differentiating its offerings.
Still, it’s an attractive time for private companies to go public. Startups are taking advantage of low interest rates and other stimulus from the Federal Reserve as well as investors’ appetite for rapidly growing companies. As a result, there already have been more initial public offerings through the first three quarters of 2021 than there were in all of 1996 — the biggest year ever for IPOs, according to FactSet.
— CNN Business’ Paul R. La Monica contributed to this report.
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