The government might be shut down, but Potbelly has sandwiches to make and stock to sell. The popular sandwich chain introduced its stock on the market today, and investors gorged themselves.
Potbelly Corp. (NASDAQ:PBPB) shares priced at $14 a share, $1 above the high end of the expected range, and this morning they more than doubled to $30 at the open. The fast-casual restaurant chain sold 7.5 million shares of common stock to the public for $105 million, and the offering is expected to close on Oct. 9.
Bank of America Merrill Lynch (NYSE: BAC) and Goldman Sachs (NYSE: GSJ) were the joint book-running managers for the offering, with Robert W. Baird, William Blair and Piper Jaffray as co-managers.
Potbelly began in 1977 as an antique store with live music in Chicago and became a neighborhood sandwich shop after the owner started offering homemade sandwiches and desserts to boost sales. In the late '90s, Bryant Keil bought the store and multiplied the concept across Chicago and then the country.
As of Sept. 23, Potbelly owned and operated 288 sandwich shops in 18 states, mainly in the Midwest, Texas and the East Coast, and franchisees run seven shops in the U.S. and 12 in the Middle East. Potbelly plans to expand by at least 10 percent annually over the long term and reported a 16 percent increase in revenue last year to $274.9 million.
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Another casual restaurant operator, Noodles and Co. (NASDAQ:NDLS), debuted shares last month and, like Potbelly, more than doubled share prices on its IPO. Chipotle Mexican Grill Inc. (NYSE:CMG) and Chuy’s Holdings Inc. (NASDAQ:CHUY) debuted shares last summer and have since gained 43 percent and 65 percent, respectively.