If you own stock in Shake Shack, Wednesday was a good day. According to Market Watch, the famous burger chain's stock jumped by 20 percent Wednesday afternoon. The result was the biggest percentage and price gain for the company in the six months since it went public.
Experts say the massive hike is likely due to the expiration of the company's lock up period, which prevented underwriters from selling any of their shares, in addition to short sellers covering their position and investor confidence in the company's potential growth. Short interest in the stock has tripled what it was five months ago, and Wednesday's volume of the more than 930,000 shares was double the full-day average.
After going public in January — and giving away free burgers to celebrate — the company's stock more than doubled from its original price of $21 (to the surprise of analysts) to between $47 to $50 in its first day. By April, the stock had tripled, trading at higher than $70 a share, making Danny Meyer an incredibly rich man with more than $450 million in Shake Shack stock.
It hasn't been all good news for the booming burger chain, which saw its stock take a plunge at the beginning of July. Despite the debut of its fried chicken sandwich, the company's stock fell from $58.80 to $53.27 on July 8. While Morgan Stanley deemed the stock too expensive, and many suspected it would round out around $38 in the near future, Wednesday's soaring prices seem to prove the naysayers wrong, at least for now.