Shares in burger chain Shake Shack (NASDAQ:SHAK) stock rose 4% overnight on news that Glenn Welling’s Engaged Capital plans
SHAK stock was expected to open today, May 15, at about $68 per share, a market capitalization of $2.8 billion.
Engaged said it has been in contact with Shake Shack management for six months and has a stake of 6.6%, worth about $185 million at the market open. So far in 2023, the stock is up 57%. Shares jumped early in May after it reported a net loss of $1.5 million, four cents per share, but .
What Welling Wants
Welling said he could increase Shake Shack’s profits through “operational efficiency.” Many outlets already use computerized kiosks for orders, minimizing headcount to cooks and clean-up.
Shake Shack came public at $21 per share. It briefly exploded to $92 per share that year before dropping to $31 two years later. At its height during the 2021 tech boom, it was worth $124 per share. The bear market low was $42.
Welling, who previously made runs at the now-private Jamba Juice and Abercrombie & Fitch
(NYSE:ANF), claims he wants changes in the burger chain’s “real estate strategy, store design, labor planning and supply chain framework.” He also wants Shake Shack to change its dual-share structure that lets founder Danny Meyer control nearly
In addition to his role at Shake Shack, Meyer runs an investment group called Enlightened Hospitality Investments, which led an investment into taco chain Tacombi . Meyer says he invests in “people-first” hospitality companies.
SHAK Stock: What Happens Next?
Changing the ownership structure of Shake Shack is the biggest ask here. will need to be paid for that to happen and for SHAK stock to truly be in play.
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
