Potbelly IPO Shows Enthusiasm for Growing Restaurant Chains
Potbelly Corp. (NASDAQ:PBPB), a restaurant chain that sells made-to-order toasted sandwiches, more than doubled in trading after its initial public offering was priced above an increased range. In the second-best trading debut on the U.S. exchange this year, Chicago-based Potbelly rose 120 percent to close at $30.77 in New York on Friday.
According to data compiled by Bloomberg, the company and shareholders combined to sell 7.5 million shares for $14 each, after initially offering them for $12 to $13. The price range was raised on October 2 after Potbelly had previously set the price at $9 to $11.
The stock surge provides a glimpse into investor enthusiasm for the potential of rapidly expanding restaurant chains. Potbelly has recently expanded both east and west, with new stores popping up in Portland, Oregon, and in New York. All in all, the sandwich chain plans to open as many as 35 new stores this year and plans to use the proceeds from the recent IPO to fuel continuing growth, along with funding a dividend and repaying loans.