SHAK stock is heading higher on Monday after Shake Shack (NYSE:SHAK) announced plans to return its Paycheck Protection Program (PPP) loan to the government.
The news comes directly from Shake Shack CEO Randy Garutti and chairman Danny Meyer in an open letter. In this letter, the two company leaders reveal that Shake Shack was able to secure a $10 million PPP loan.
Unfortunately, Shake Shack notes that funding for the PPP loans has run out. As a result, many small businesses have been unable to obtain funding through the loan program. Shake Shack is returning its loan so that other small businesses may have a chance to obtain funding during the novel coronavirus pandemic.
This doesn’t mean that Shack Shake isn’t raising money to deal with the economic impact of coronavirus. However, it’s choosing to raise money by selling shares of SHAK stock, rather than taking advantage of the PPP loan.
Here’s a portion of the open letter from Shake Shack’s Randy Garutti and Danny Meyer.
“We urge Congress to ensure that all restaurants no matter their size have equal ability to get back on their feet and hire back their teams. We are an industry of 660,000 restaurants with nearly 16 million employees. While it is heartening to see that an additional $310 billion in PPP funding is about to be approved, in order to work for restaurants, this time we need to do it better.”
SHAK stock was up 4.03% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.