Investors showed reduced appetite for an electronics retailer, a construction services provider or an advertising technology company. But on Friday, they proved especially hungry for pad Thai and macaroni and cheese.
Shares in Noodles & Company, a fast-casual restaurant chain, doubled their initial public offering price by midafternoon on Friday, at $36.15. That’s after having climbed higher earlier in the morning.
The company raised $97.2 million in its offering and is now valued by the market at more than $803 million.
The hunger among investors (apologies for the puns, but it’s lunchtime, and DealBook is starving) may prove a relief to the I.P.O. community after a rough week for companies making their market debuts. Three prominent offerings â€" those for the CDW Corporation, HD Supply and Tremor Video â€" priced below their anticipated ranges on Wednesday, citing the recent marketchoppiness.
Concerns that the Federal Reserve may begin pulling back on its economic stimulus program have led to a halting of what had once seemed like a steadily climbing market, giving jitters to potential investors in risky transactions like I.P.O.’s. That led issuers and their advisers to choose to stay safe and price below expectations to ensure better trading of the newly public stocks.
But even that caution may not have helped. HD Supply was trading at $18.41 by midday Friday after having priced at $18, while Tremor Video was down nearly 20 percent from its offering price, at $8.05. CDW has fared a little better: at $18.66, its shares are up nearly 10 percent over their I.P.O. level.
Like CDW and HD Supply, Noodles & Company is owned by private equity sponsors, in this case Catterton Partners and Canada’s Publ! ic Sector Pension Investment Board. But investors seemed less concerned about the level of debt at Noodles & Company, which was $93.7 million as of Jan. 1.
And unlike Tremor Video, which is the first of several advertising technology companies to go public, Noodles & Company has a readily understandable and proven business. Led by Kevin Reddy, a former chief operating officer for Chipotle Mexican Grill, the company plans to expand its reach nationally.
For the quarter ended Jan. 1, Noodles & Company reported a 17 percent gain in revenue, to $300 million, and a nearly 37 percent gain in net income, to $5.2 million.
