Restaurant chains don’t always opt to go public. That said, this month began in an interesting way as First Watch (NASDAQ:FWRG) did exactly that, making its debut during a complicated year for the industry. The stock hasn’t enjoyed a good month of trading so far, but that hasn’t stopped one of its competitors from following in its footsteps. Portillo’s, a Midwest chain of restaurants known for American-style street food has announced it has filed for an IPO, adding to what so far has been a very busy IPO season. Get ready then for the PTLO stock IPO.
What to Expect From the PTLO Stock IPO
Portillo’s opened its first restaurant in 1967 and according to its U.S. Securities and Exchange Commission filing, now operates 67 restaurants spanning nine different states. Based in Oak Brook, Illinois, it has always maintained a focus on Chicago-style street food, specifically hot dogs, beef burgers and salads.
The offering is expected to contain 20.27 million shares of Class A common stock with an IPO price range of $17-$20. In total, this could raise as much as $405.4 million. Following the IPO, Portillo’s is expected to have 33.57 million Class A and 37.91 million Class B outstanding shares. At the current price points expected for the IPO, this would net the company a market capitalization ranging between $1.2 and $1.4 billion.
Investors at this point expect Portillo’s to start trading in the coming days, and IPO Boutique specifically lists a trade date of Oct. 21, as indicated by a recent Twitter post. If all goes according to plan, the stock will trade on the Nasdaq under the symbol PTLO with Jefferies, Morgan Stanley, BofA Securities and Piper Sandler serving as the deal’s primary underwriters.
Why This Matters
The complicated industry landscape makes this a difficult time to properly assess a restaurant chain’s decision to go public. While requests for dine-in options have been increasingly high since the pandemic’s initial regulations began to lift, the labor shortage has made it difficult for restaurants to fill the growing demand.
While First Watch has had a difficult trading journey so far, coffee chain Dutch Bros (NYSE:BROS) has done much better. Although restaurant software producer Toast (NYSE:TOST) enjoyed a strong start to trading following its fall IPO, October has seen it decline fairly steadily.
Part of Dutch Bros’ success, though, is likely due to its completely take out business model, one that allows restaurants to operate with fewer staff members and quickly adapt to any new lockdown measures. Take-away seems to be an in integral component in Portillo’s business model, though, as indicated by how its website is configured and its user-friendly aspects.
The company is certainly worth watching as the PTLO stock IPO draws near.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
