GrubHub Chows Down on Wall Street with a $2B IPO!

image

It’s a big day for GrubHub founder Matt Maloney, whose Chicago-based online takeout ordering company went public today, with the stock up 30 percent to about $34 per share by day’s end Friday, with investors stirred by hope that the convenience of food ordered digitally will attract customers in more and more locations.

The company, which went live on the New York Stock Exchange under the symbol GRUB, priced its shares at $26 per share, raising $192.4 million for itself and investors who wish to sell. That’s reportedly above a previous price range of $20 to $22 earlier this week and it valued the company at about $2 billion, although that valuation went up today. The company has also raised its deal size to 7.41 million shares from 7.03 million, suggesting that it is reacting to investor demand that might have exceeded its earlier expectations.

Analysts have predicted that the stock will fare well, in part because anyone who orders takeout food using the platform is familiar with it. (Most respondents to a general survey on takeout and delivery order frequency use it once a week, according to Statista chart below.)

“They are definitely a trendy business. In addition to the investment world, a number of consumers have used them or are familiar with them, so likely that familiarity will translate into interest and investment in an IPO,” Darren Tristano, executive vice president at restaurant industry consultancy Technomic told the Chicago Tribune.

Now a decade old, GrubHub has been growing at a good clip, growth that sped up last May, after the company announced merger plans with New York City-based rival Seamless. In aprospectus filed with the Securities and Exchange Commission Wednesday, the company said it brought in about $1.3 billion in revenues across operations in more than 600 U.S. cities where it connects customers with mostly local independent restaurants The company’s revenue climbed to $137.1 million last year, while its net profit slid to $6.8 million from $7.9 in 2012.

By Jarrett Neil Ridlinghafer 
CTO of the following –
4DHealthware.com
Synapse Synergy Group
EinDrive.com
HTML5Deck.com
PerfectCapacity.com
CSPComply.com
Chief Technology Analyst, Author & Consultant
Compass Solutions, LLC
Atheneum-Partners
Hadoop Magazine
BrainBench.com
Cloud Consulting International

Advertisements