The much-anticipated initial public offering (IPO) of the fast-food chain Guzman y Gomez was a notable winner on an otherwise sideways day of trading for the ASX 200. Amid the steady hum of the market, the food company made a remarkable debut with shares soaring above the initial offer price.
Guzman y Gomez (ASX:GYG) launched its IPO at $22 per share, raising $335 million, an amount surpassing the projected target of approximately $242.5 million and making it the largest IPO on the ASX in three years. When trading commenced, investors showed their appetite for the fast-food operator, boosting its share price by an impressive 36% to open at $30. This enthusiasm was somewhat short-lived as the overall ASX 200 index failed to register any significant movement, closing the day unchanged.
Co founder Steven Marks saw the firm bounce from a $2.2bn market cap on launch, through the $3bn mark by market close and was thankful for investors and the team “making today a reality,”. Whilst the hype surrounding IPOs has been very much in tact across Europe and the US with recent launches outperforming, GYG clearly have their feet on the ground regarding the longer term importance of fundamentals. Mr Marks’ comment “We know in the long run, the value of the stock will reflect the valuation of the business.” emphasises the understanding that the business will need to continue delivering in order to maintain a similar level of sentiment.
GYG began back in 2006 in the Sydney suburb of Newtown but now operates stores in Tokyo, Singapore, and the US. One of the stated goals of the fundraise is to expand operations to 1000 stores around Australia, which will certainly take some doing. If they are to meet that goal in the next 20 years, you will be seeing a lot morre Guzman y Gomez stores on your streets.
Whilst the excitement surrounding the IPO kept markets occupied, in other areas of the ASX, the financial sector was the largest sectoral gainer, after seeing a bump of 0.32%. Almost all of the other major sectors were unchanged, with minor movements here and there.
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