This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

Investors Hungry For Potbelly IPO

Stocks in this article: NDLSCMGSBUXPNRA

NEW YORK ( TheStreet) -- Potbelly's initial public offering expected Friday morning is rumored to be oversubscribed from investors eager to take a bite into the strong performing category of fast-casual restaurants this year, but don't expect other popular sandwich shops to follow suit in the near future.

"We're past the point of really having any significant capital needs," said Don Fox, CEO of Firehouse Subs of Jacksonville, Fla.

"The owners love what they are doing. They're still very engaged in the business. There's no reason from a personal or business standpoint to make that kind of effort and there are negatives to becoming a public company that can affect performance," said Fox of the 670-location sandwich chain. "And frankly that public environment would not be in aligned with the way we conduct business," Fox added, referring specifically to short-term decisions for shareholder gain as opposed to long-term decision-making.

Only 28 of Firehouse Subs' locations are corporately owned. That's a significant and important difference between Potbelly and others like Firehouse Subs.

Unlike many of its sandwich-shop competitors, Potbelly is choosing to expand in the hot, fast-casual restaurant industry through corporate-owned locations as opposed to franchising. Potbelly said it does plan to do some franchising.

Potbelly plans to raise roughly $94 million from the IPO, the Chicago-based sandwich shop said in an updated S-1 registration filing with the Securities and Exchange Commission on Wednesday. It will sell 7.5 million common shares -- split between 146,442 shares sold by existing stockholders and the rest from the company. (It also has an overallotment of up to 1.2 million shares to sell to the underwriters). Potbelly is listing under the ticker symbol PBPB on the Nasdaq.

Banking on the strong IPO market this year, Potbelly on Wednesday upped the offering price to between $12 and $13 a share from the original pricing of $9 to $11 a share, according to the filing.

But it plans to use roughly 60% of the proceeds it receives and immediately return those to shareholders in the form of a cash dividend. Using the midpoint range of $12.50 a share, the company expects to receive net proceeds of $83.9 million, $49.9 million of which be used to pay a cash dividend on common and preferred stock, Potbelly said in the filing.

1 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,828.24 +0.49 0.00%
S&P 500 2,067.56 -5.27 -0.25%
NASDAQ 4,791.63 +4.3130 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs