Shares of online food-ordering company GrubHub
(NYSE:GRUB) -- which was formed last year via a merger of Chicago-based GrubHub and New York-based Seamless -- soared above $40 on their first day of trading Friday morning. This was well above the company's initial public offering price of $26 per share.
Shares were expected to do well, especially after the company raised the offering price from $20-22 to $23-$25 earlier in the week. By Thursday night, shares were priced at $26 in a bigger-than-expected offering.
GrubHub ultimately offered 7.4 million shares, and of that, it sold 4 million with the rest sold by shareholders. At its current price, the company is valued at over $3.15 billion
Although the 10-year-old company's IPO marks a milestone for Chicago's tech community, GrubHub is still facing some issues: Profits have been declining
(net income in 2013 was $6.7 million, down from $15.2 million in 2011) and there may be a costly lawsuit
on the horizon by a software company in California that claims GrubHub is one of several companies that violated patents related to online order-synching technology and online menus.
GrubHub is among several companies making their stock market debut today, and it is so far leading the charge.
No positions in stocks mentioned.
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