Bankers are celebrating Cava as the catalyst for a new bull market, and they believe it has the potential to push companies towards going public.
“This was a highly anticipated day on Wall Street, marking the end of the IPO freeze,” stated Dan Ives, managing director at Wedbush Securities. “It’s the IPO that made headlines around the globe.”
M&A advisers are eagerly anticipating an increase in business opportunities that could potentially reverse the downward trend in banking revenue and boost bankers’ bonuses.
“This indicates that the game is back on and investment bankers, who had been enjoying an 18-month vacation, will have to get back to work,” said Thomas Hayes, Founder of Great Hill Capital. “All the pending IPOs will hit the market next year.”
Cava’s stock price almost doubled upon opening, jumping from $22 per share to $42 per share.
“We believe that the market always welcomes sustainable long-term growth stories, particularly brands that redefine their respective categories, as we aim to define the Mediterranean category,” stated Brett Schulman, CEO of Cava, in a press release.
However, not everyone is convinced. Some market watchers believe that Cava could follow the path of Sweetgreen, which debuted at $52 and has since dropped to around $10 per share as investors realized the popular salad chain’s profitability was not as sweet as expected.
Others, on the other hand, remain undecided for the time being.
“The verdict is still out,” said Kristi Marvin, Founder & CEO of SPACinsider. “I would like to see one or two more successful IPOs before declaring it game on.”
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