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Sweetgreen Stock IPO: 7 Things To Know As SG Shares Start Trading Today


Following its exceptional IPO, Soft green (NYSE:SG) the stock looks bittersweet. Despite an expected range of $ 23 to $ 25, the salad launcher opened at $ 28 per share, which earned it a valuation of nearly $ 3 billion.

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So what do you need to know

The Los Angeles-based brand is one of many quick-service restaurants that may have thrived during the Covid-19 pandemic. However, year over year Sweetgreen reported a drop in revenue of around 20% as fewer people chose to order online for a quarantine-friendly pickup. About 68% of its revenue comes from online orders, compared to 32% from walk-in sales. As such, investors are divided on the salad operator.

Sweetgreen’s Restrictive Supply Chain Model Limits Growth Compared to Quick, Relaxed Giants Chipotle (NYSE:GCM) Where Shake Shack (NYSE:CHAK). Instead of integrating vertically, it strives to source locally. Partly because of that, its losses fell from $ 67 million to $ 139 million in 2020, even as many top restaurants took advantage. This only adds to the fact that Sweetgreen has yet to have a profitable quarter. For bears, this is a key business point and may prevent the Sweetgreen stock from winning.

SG will open later today, but before that, what do you need to know?

Sweetgreen Stock IPO: What to Know Before Trading

  1. First off, Sweetgreen will trade under the SG ticker when it opens this afternoon on the New York Stock Exchange.
  2. On Wednesday, Sweetgreen increased the size of its IPO from $ 23 to $ 25 to $ 28. It also went from a stock offering of 12.5 million to 13 million.
  3. Class A shares give investors one vote per share, which means almost all decisions will be made by Class B shareholders, who get 10 votes per share.
  4. At $ 28 a share, the health-conscious brand’s price is to rival Chipotle in terms of expected growth.
  5. Work from home trends are detrimental to Sweetgreen sales. Before the pandemic, Sweetgreen was a popular office choice and had over 1,000 drop-off points in many workplaces. With the pandemic subsiding, it is unclear to what extent Sweetgreen will see a return to its previous numbers. Currently, 35% of its pre-pandemic “outposts” are open.
  6. Many see Sweetgreen as comparable to a tech value in terms of a growth model and commitment to digital innovation.
  7. Sweetgreen opened its first restaurant in 2007 in Washington, DC It started as a group of Georgetown college students looking for a healthier alternative to the standard campus fare. Many of these founding students remain the primary owners of the business.

As of the publication date, Shrey Dua does not have (directly or indirectly) any position in any of the stocks mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.


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