After decades of expansion as a private company, Jersey Mike’s Subs (NYSE: JMKE) made its public market debut on July 30.
However, the launch seemed to disappoint investors, as the stock closed its first trading session below its official offering price
The stock has since recovered, but Jersey Mike’s faces some challenges that could weigh on it. Thus, for now, investors may want to avoid the stock for three reasons. 1. Post-IPO performance As mentioned, Jersey Mike’s closed its first trading session at $21.63.
Hence, those who bought Jersey Mike’s IPO closed about 6% below its $23 IPO price on day one, though it later recovered. Admittedly, stocks often struggle post-IPO, including Space Exploration Technologies, known as SpaceX, which surged in its first days of trading before pulling back. Nonetheless, Jersey Mike’s IPO performance was worse because early investors, such as Blackstone, used the IPO to sell a portion of their holdings in the restaurant chain.