GrubHub went public Friday and delivered strong returns to investors.
NEW YORK (CNNMoney)
Shares of the online food ordering company surged more than 40% in early trading to $37 per share.
GrubHub priced its initial public offering of 7.4 million shares at $26 per share late Thursday. GrubHub raised nearly $200 million in the deal.
At its current price, the company is valued at about $2.8 billion.
It was pretty clear that there was strong demand for GrubHub, which trades under the symbol "GRUB (GRUB)." The company raised its initial price range of $20-$22 share earlier this week to $23-$25 a share.
The company was formed last year via a merger of Chicago-based GrubHub and New York-based Seamless, and was named GrubHub Seamless.
Related: Amid IPO, one of GrubHub's risk factors just got riskier
GrubHub has reported strong growth in the past few years. The company generated $137 million in revenue last year, up significantly from 2012, according to its filings with the Securities and Exchange Commission. It had 3.4 million "Active Diners" and more than 28,000 affiliated restaurants.
But despite the growth, GrubHub's profits have been declining. Net income last year was $6.7 million, down from $15.2 million in 2011.
The company is facing a potentially expensive lawsuit by a software company in San Diego that claims GrubHub, along with several other food and technology companies, violated patents related to online order-synching technology and online menus.
The IPO market has been hot this year. And GrubHub is one of four companies making their stock market debut Friday.
First Published: April 4, 2014: 10:17 AM ET
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