Why This Trader Says Shake Shack is 'Dead'

ChartPattern.com Founder Dan Zanger said on Benzinga's #Premarket Prep that Shake Shack Inc SHAK "is dead. No one wants it." To support his argument, Zanger pointed to daily volume, which he said fell from 3 to 5 million shares after the IPO down to 150,000 shares today.

Shake Shack has been evidence of "goofy moves in a market," with the stock trading in a $38.63-$96.75 range since it IPO'd in February. The stock has been drifting lower after spiking to those highs and falling to $73.69 in a matter of days in May. Still, at these levels, Zanger said that each Shake Shack is valued at $50 to $60 million - a high price for a "hamburger stand."

Shares of Shake Shack are still higher from where they initially traded following the company's IPO. Throughout February and into March, the stock hung around the low- to mid-$40 range before doubling through April and into May. Since its highs, Shake Shack has come off 33 percent.

Zanger dismissed the stock, noting that his "favorite word in the stock market is, ‘next.'" Zanger seemed to suggest that the bottom of the stock was far from near, noting that "nobody wants it."