Greenberg: Shake Shack Could Signal a Top for Restaurant IPOs

NEW YORK (Real Money) -- If Reuters is right and Shake Shack takes advantage of the seemingly unstoppable appetite among consumers and investors for new burger joints, I have a prediction: It will mark the top of the burger bubble, and if not burgers, certainly the market for restaurant IPOs.

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Unless, of course, it doesn't, and instead it will open the floodgate for the last wave of restaurant IPO wannabes.

If and when it files, Shake Shack will be the latest in a string of restaurant IPOs, most of which have come out of the gate like a rocket, only to fade after the first turn.

Shake Shack, is without question, good. Its quality is good. Its concept, which is employee-centric, is very good. Management is considered really good. And most of all, its majority owner, Union Square Hospitality, run by legendary New York restaurant maven Danny Meyer, is considered exceptional.

We don't know, of course, what the numbers will be. But on the basis of steady lines in the few Shake Shacks I've either eaten in or passed, it's fair to say they're probably better than most. (I'd love to know the annual revenue of the unit in New York's Times Square, for example. Sure, it's Times Square, but that unit must be hitting some kind of record.)

Trouble is, in the land of burgers, the space has exploded in recent years, and not just Five Guys and Smashburger (always in the IPO rumor mill), but a lot of local chains that are sparking big followings, such as SoCal's Burger Lounge and The Habit (the latter of which is rumored to be eyeing an IPO). And they're going up against the likes of cult fave In-N-Out Burger on the West Coast (amid rumblings that quality has taken a spill) and the granddaddy of them all, McDonald's (MCD) , which has not entered old age gracefully.

Lost in all of this is this, when it comes to burgers, is that they're all going up against local burger shops, which as a group are growing faster than the burger chains and all quick-serve restaurants.

According to the blog Burger Business, independent burger shops last year showed unit growth of 6% this year, compared with just 0.3% for the chains and 0.8% for all restaurants.

And that may explain why Five Guys, Smashburger and other burger chains, as hot as they may appear based on hype, aren't going public.

There may be something else: They just aren't doing that well.

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