It is a promising time for retail investors. Just three months ago, we witnessed the first company — Myomo (MYO) — to list on a major stock exchange utilizing Reg A+, providing instant liquidity and a free trading market to retail investors. Following Myomo; Adomani (ADOM), ShiftPixy (PIXY), Chicken Soup for the Soul Entertainment (CSSE), and Arcimoto (FUV) have all succeeded in using Reg A+ as an investment vehicle for going public. As companies like these continue to leave an imprint on Wall Street, a larger number of notable companies are beginning to take notice.
Just today, FAT Brands, known for favorites such as Fatburger and Buffalo’s, became a publicly listed company on the NASDAQ Stock Market and began trading under the ticker symbol “FAT” after successfully raising $24 million from the investment banking community as well as the retail investor community. In what has become one of the most talked about Reg A+ offerings to date, FAT Brands gave customers, fans, and investors of all types the opportunity to buy into its IPO.
When Myomo listed on the NYSE MKT, investors who got in on the ground floor saw their share price increase 200% after its first week of trading. Two of the four that followed also doubled or tripled their share prices, before moving down towards their originally listed share prices.
FAT Brands’ name and staying power has the potential for strong aftermarket trading. The company has a $96 million pre-money valuation and has seen five years of positive annual same store sales growth. In four years, the company’s EBITDA margin expanded from 27.2% to 64.3%. Using a portion of the funds from the offering, FAT Brands acquired Homestyle Dining LLC, gaining both Ponderosa Steakhouse and Bonanza Steakhouse for $10.5 million. The deal gains FAT Brands 120 locations and brings the company’s footprint to over 300 locations across 20 countries.
Restaurant stocks have ultimately had a rough year, and one way companies are working to mitigate loss is by adapting to the digital age. Restaurant group leaders like McDonald’s, Domino’s, and Dunkin’ Donuts are all maintaining their edge by incorporating mobile order and payment options to help make the process seamless for customers who are getting accustomed to paying and ordering everything online. FAT Brands has also introduced their native mobile application and partnered with third party delivery services to reach a wide scope of customers off site.
It’s too soon to tell if FAT Brands will break away from the slump, but the globally-recognized brand has a fair chance and is worth paying attention to.
Disclosure: The opinions expressed in this article aren’t Insider Monkey’s or any of its staff’s. This article is written by Crowdfundx. Insider Monkey is compensated by CrowdfundX on behalf of FAT Brands, Inc. for publicizing the offering of FAT Brands, Inc.’s securities.