Shake Shack Inc (SHAK) is plunging, after the company unveiled a lackluster secondary offering
Unlike
Tesla Motors Inc (NASDAQ:TSLA),
Shake Shack Inc (NYSE:SHAK) is tumbling after the company unveiled a secondary offering. Specifically, the fast-food firm last night said
it will sell 4 million shares at $60 apiece -- a discount to last night's close at $64.79. As such, traders have been hitting the bricks, with SHAK off 10.3% at last check to linger near $58.14.
Longer term, SHAK has performed much better than some other stocks in Wall Street's freshman class -- like
Etsy Inc (NASDAQ:ETSY) and
GoDaddy Inc. (NYSE:GDDY), for example -- up 24% since going public in late January. However, since hitting a post-IPO peak of $96.75 in late May, the shares have shed 40%.
On the sentiment front, not much is expected from the Wall Street newcomer -- even in the wake of
this week's stellar quarterly earnings report. Among the six analysts covering the shares, each one maintains a "hold" or worse recommendation on the stock. Meanwhile, the average 12-month price target of $45.20 stands at a discount to current trading levels, and resides in territory not charted since mid-March.
This skepticism is seen elsewhere, as well. In fact,
short interest jumped 5.6% in the most recent reporting period, and now accounts for 41.3% of Shake Shack Inc's (NYSE:SHAK) available float. In fact, the 2.4 million SHAK shares sold short represent the loftiest amount of bearish bets placed against the stock in its short life span.