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Shake Shack IPO buzz builds as estimated price gets boosted

Chris Nichols

Shake Shack, the burger seller that's about to go public, has raised the anticipated pricing on its much-discussed IPO, adding to the buzz that's been building around the name for months.

New York-based Shake Shack, created by restaurant entrepreneur Danny Meyer, now says the offering of its Class A shares should price between $17 and $19 a share, up from the original estimate of $14 to $16. Shake Shack, which has more than 60 stores worldwide, about half of them overseas, is likely to start trading later this week.

Whereas previously, proceeds would have been as much as $92 million, including shares placed through the underwriters' over-allotment option, now Shake Shack could raise as much as $109.3 million. Insiders and current management will have about 85% of the voting power in the company after the offering.

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Though not every IPO gains significantly when it first starts trading, it won't be a surprise at all if Shake Shack does in fact surge. The pre-IPO talk around the restaurant has been substantial, largely because it's a fast-casual, "better burger" restaurant that investors believe has great growth potential, and helped by the fact that it's based in New York, the center of finance and the business media.

Shake Shack will be the second burger specialist to go public in recent months. In November, California's Habit Restaurants (HABT) began trading. That stock opened at $30, well above its offering price, then eventually got to the mid-$40s. However, it's fallen back since, now trading around $33.

The shares of Shake Shack will list on the New York Stock Exchange. The planned symbol is SHAK.