Shake Shack fast food restaurant, building exterior at night, Boston, Massachusetts, USA.
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Activist investorStarboardValue has built a new stake in Shake Shack, a source familiar with the matter told Reuters on Wednesday, sending the company’s shares up about 9%.
Earlier in the day, the burger chain had reported second-quarter sales and profit above Wall Street estimates, driven by strong demand for value meals as consumers face rising costs of living.
The results were a contrast to its prior quarter when its shares cratered 30% after it reported a quarterly loss and warned of weak consumer spending. The company, which has a market capitalization of $2.83 billion, at the time alsonamedits new financial head.
“We appreciate the investment in our company and the confidence expressed in the quality of our brand and the strength of our operations,” Shake Shack said in a statement to Reuters.
StarboardValue previously made investments in other restaurant companies such as french fry supplier Lamb Westonas well as coffee chain Starbucks.
Bloomberg was the first to report thatStarboardhas taken a position of several hundred million dollars in Shake Shack.
Starboarddid not immediately respond to a request for comment.
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