US stocks: Jersey Mike's shares fall 8.7% in New York debut

Jersey Mike's shares opened 8.7% below their initial public offering price on Thursday, giving the sandwich chain a valuation of about $6.7 billion in its New York Stock Exchange debut.

The offering raised about $1 billion after pricing at the midpoint of the company's marketed range on Wednesday, with the company selling roughly 43.5 million shares at $23 apiece.

Jersey Mike's offering marks one of the largest restaurant IPOs in recent years, bringing ‌a fast-growing ⁠sandwich chain into ⁠a market that has seen few major food-service listings since the pandemic.


The Tinton Falls, New Jersey-based company operates a fast-casual submarine sandwich franchise, with more than 3,300 locations across the U.S. and Canada.

Its listing tests investor appetite for the wider retail sector, where issuers are gradually returning to the market after a years-long slowdown.

U.S. IPOs have gathered steam this year, predominantly led by technology, defense and industrial listings, pushing proceeds past $140 billion, according to data from Renaissance Capital, a provider ⁠of IPO-focused ‌research and ETFs.

The momentum follows a brief lull at the start of the year, when the U.S.-Iran conflict pushed issuers to the sidelines, although many are now ⁠starting to look past the volatility and move ahead with plans to go public.

CONFIDENCE TEST FOR RETAIL IPOs

Jersey Mike's is going public at a time when restaurant businesses are grappling with elevated interest rates, higher operating costs and stretched consumer budgets.

The Dow Jones U.S. Restaurants & Bars Index, which tracks the likes of McDonald's, Starbucks, and Chipotle, is down over 1% this year, while the broader market has risen about 7%. Suja Life, which went public in May, has lost over half its value.

A successful listing ‌for the brand could help reinvigorate retailers' confidence in pursuing their ambitions to go public this year.

Inspire Brands, the owner of Dunkin', Arby's and Jimmy John's, confidentially filed for a U.S. IPO earlier ⁠this year. Gas station chain Cumberland Farms and Men's Wearhouse owner Tailored Brands also filed for IPOs this month.

Jersey Mike's was acquired by private equity firm Blackstone last year in a deal valued at about $8 billion. The sandwich chain plans to open 400 stores across the UK and Ireland in partnership with founder and former CEO Peter Cancro.

Cancro bought Mike's Subs in Point Pleasant, New Jersey, in 1975 at age 17 and began franchising the business in 1987. The company later became Jersey Mike's and grew into one of the largest sandwich chains in the United States.