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Starboard Value takes a large stake in Shake Shack after mixed results
Shake Shack posted same-store sales up 3.5% while revenue missed expectations, and the stock surged after Starboard’s activist move.
Shake Shack Inc. drew renewed attention after Jim Cramer discussed Starboard Value’s large activist stake in the company on the August 11 episode of Mad Money, following what he described as a mixed quarterly earnings report, according to Yahoo Finance. Cramer said same-store sales rose 3.5%, but revenue came in weaker than expected and earnings beat by 4 cents versus a 39-cent basis.
Cramer said Starboard’s disclosed position is worth several hundred million dollars and could make Starboard the company’s largest shareholder. He added that Starboard is pushing for Shake Shack to expand franchising in the United States rather than focusing primarily on company-owned stores, describing how that shift turned the market reaction to the quarter positive.
Cramer referenced Starboard’s past track record of restaurant turnarounds, including work tied to Olive Garden’s parent, Darden, and a campaign with Papa John’s that began in 2019. He also noted Starboard does not always succeed, pointing to its earlier effort involving Bloomin’ Brands, parent of Outback Steakhouse.
The article also highlights investor skepticism tied to discretionary spending pressure and competition in the fast-casual burger space. It says that on August 5, DA Davidson analyst Matt Curtis maintained a Buy rating on Shake Shack while raising the price target from $70 to $85, citing strong digital channel expansion.