WASHINGTON — An initial public offering is usually an exciting moment on Wall Street, but in a volatile, post-pandemic market, that is especially true.
Washington D.C.-headquartered Cava (ticker: CAVA) opened at $22 a share on the New York Stock Exchange Thursday to much fanfare, quickly exceeding that share price. Its price per share doubled during its first day of trading before closing Thursday afternoon at $43.78.
The Mediterranean fast casual eatery has more than 260 locations.
And, it may be following the Chipotle trajectory, according to Rodney Lake, Director of the GW Investment Institute at George Washington University.
"You can look at Chipotle and the growth of Chipotle over time as a blueprint for a company like Cava, that has a similar fast casual concept where people can select, you know, certain parts of their meal, to make it customized," Lake said. "This model seems to obviously work, and it's worked very well for Chipotle."
According to a prepared statement, Cava plans to use the proceeds from the offering for, among other things, new restaurant openings and to finance construction for a new production facility in Verona, Virginia.
Jim Angel, a finance professor at Georgetown University, said Cava's strong IPO is promising for the industry.
"It says that the market believes that there are still really promising opportunities for the survivors of the pandemic, for the restaurant chains that managed to survive, and now, they're thriving," Angel said.