Shake Shack Shares Sizzle On Market Debut

Shake Shack, a former New York City food cart which is now a burger chain challenger to McDonald's, rocketed upon its stock market debut on Friday.

Shares spiked nearly 120% to close at $45.90 on Friday, valuing the chain at $1.6bn (£1bn).

Shake Shack has hit on a winning formula with millennials by serving up hormone and antibiotic-free beef, crinkle-cut fries, shakes and beer.

Fifty-six-year-old founder Danny Meyer's 21% stake was worth about $390m based on the trendy company's opening day high.

It served burgers free of charge on Friday to the public out of food trucks on the street outside the New York Stock Exchange, where it was trading under the ticker symbol "SHAK".

The company has 63 locations in nine countries, but most of them are along the US East Coast. Others are in Las Vegas, Chicago, London and Istanbul.

It plans to use some of the cash raised from its initial public offering to open restaurants in new markets and to renovate existing stores.

The company said it expects eventually to have 450 locations.

Shake Shack started out in 2001 as a hot dog cart in Manhattan's Madison Square Park, before establishing itself as a kiosk three years later.

Its flotation comes two days after McDonald's dumped its chief executive amid its worst US sales slump in more than a decade.

Shake Shack is still a fraction the size of McDonald's, which has more than 36,000 locations around the world, including more than 14,000 in the US.

But it is one of the so-called "fast-casual" upstarts, including Five Guys and burrito-maker Chipotle, which is taking a bite out of the fast-food behemoth's market share.

Americans ordered nine billion burgers at US restaurants last year, up 3% on the year before, according to market research group NPD.