Fancy fried chicken sandwiches were not able to stop burger chain Shake Shack's stock prices from plummeting yesterday. The restaurant released its first ever chicken sandwich, called the ChickenShack, at its Brooklyn locations. While the sandwich — which consists of fried chicken breast, pickles, buttermilk herb mayo — proved to be popular, the chain's stock did not. According to Bloomberg, it plunged from $58.80 to $53.27 yesterday.
Ever since the company went public earlier this year, the stock price has been surging. It began trading at $21 per share before quickly rising to $50 per share. In April, Shake Shack's stock prices crossed the $70 mark before eventually trading above $90 in May. However, the price fell when analysts at Morgan Stanley downgraded the stock, noting, "Any way you stack it... SHAK is expensive."
Business Insider quotes the analysts as saying: "While post IPO euphoria and elevated valuations are not new or unique to SHAK, the difference between what we see as fair value and current market price represents an extreme disconnect." The bankers believe that shares of the burger chain's stock should fall by 30 percent and should trade at $38 in the near future. While the chain's price did close a bit higher than $53.27 yesterday, prices are are still down to $52.72 this morning.