Shake Shack is doing what most firms doing IPOs have done, waited until its growth reached a peak for maximum hype of their IPO to assure maximum sales volume and highest pricing of their newly issued stock.
You mean they sought to maximize the value of the company before they offered shares to the public? EGADS!
Shake Shack has grown at a high rate since its founding, but that growth has started to decline this year, which is why the IPO is being issued now.
And?
That's what IPOs are all about today. They are not about taking a small company public so that it can become a big company, they are about taking a private company which has become big and milking the public for money to enrich the people who own that company.
Actually, IPOs are about both (except the nonsense about 'milking the public'...the public can't be milked if they don't buy the stock offering). Private companies are very often owned by people who founded, run, and grow the company. If they do a good job, the future profit stream of the company is discounted to a present value, and a price per share of ownership is derived. I certainly hope the IPO is about enriching the people who own the company. Shouldn't it? And in any case, IPO rules tightly govern how and when an owner can cash out. That's why the tech bubble destroyed thousands of paper millionaires before they could cash out.
The money does not go into expanding the company, it goes into the pockets of the present owners and makes them fabulously wealthy.
Again, not correct. Demonstrably, patently false. The issuance of stock merely puts a "public" price on the shares owned by management. The proceeds of the IPO, after fees, go to the company, but not to executives, and if/when execs do cash out, it's done by selling shares on the open market. It doesn't come from the money that comes from an IPO.
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