Identify the company and its industry. Company: El Pollo Loco Holding, Inc. Ticker: LOCO Exchange: Nasdaq Sector: Services Industry: Restaurants El Pollo Loco is fast casual restaurant that specializes in fire grill fresh chicken, which is citrus marinated. The company menu consist of chicken burritos, quesadilla, Pollo bowls, tortilla soup and Pollo salads. El Pollo Loco has 401 restaurants, which includes 168 company operated and 233 franchised restaurants, which are located in California, Nevada, Texas, and Utah. The company was founded in 1980 and the headquarters are based in Costa Mesa, California (Yahoo, 2014). Discuss important financial and other facts about the company from its SEC filings. El Pollo Loco Financials Revenue = …show more content…
Common stock, par value $0.01 per share Amount to be registered = 8,214,286 Proposed maximum offering price per share: $15.00 Proposed maximum aggregate offering price: $123,214,290 Amount of registration fee: $15,871 The list of underwriters: Lead underwriter: Jefferies LLC and Morgan Stanley Underwriter: Baird, William Blair, and Stifel Nicolaus & Company Auditor: BDO USA, LLP Transfer agent: American Stock Transfer & Trust Company, LLC 424B4 filing includes: Share issued= 7,142,857 Public offering price: $15.00 per share Total offering = $15 x 7,142,857 shares = $107,142,855.00 Underwriting discount and commission: $1.05 per share Total underwriting discount and commission = $1.05 x 7,142,857 shares = $7,499,999.85 Proceeds to us before expenses= ($15.00 – $1.05 = $13.95) Total = 13.95 x 7,142,857 shares =$99,642,855.15 (Nasdaq, 2014). How successful was the IPO in raising capital? The company IPO was successful and the company was able to raise $113 million by selling 7.1 million shares (LA Times, 2014). The opening price in the first day of trading was $19 per share and the price jump to$24 per share. The company left some money on the table by pricing the IPO at $15 per share and the management could have raise more capital by increase IPO price to $20 per …show more content…
What has happened to the company since the IPO? The current price of the stock is $35.86 per share, which is more than 100% and company is planning to use the capital to pay down heavy debts because the company is paying $40 million in annual interest payments. In addition, the company is planning an expansion to open more restaurants and it expects to open 9 to 11 company-owned restaurant and 4 franchised locations this year(LA Times, 2014). Recently, the company opened a restaurant in Houston, Texas and expects to open 4 more in Houston in the 8 months (Nasdaq, 2014). What is the trend in the stock price of the company since the IPO? The stock price is bouncing around the $35 per share mark and slight uptrend and investors are optimistic about the company. The stock trend is flat because investors are waiting for quarterly results before buying or selling. Investors would like know how stable is the growth and the sales number before making a