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Here's How Much Investing $1,000 In The 2014 GrubHub IPO Would Be Worth Today

Here's How Much Investing $1,000 In The 2014 GrubHub IPO Would Be Worth Today

Investors who owned stocks in the past six years generally experienced some big gains. In fact, Since April 4, 2014, the SPDR S&P 500 (NYSE: SPY) total return is 88.9%.

On that day in 2014, GrubHub Inc (NYSE: GRUB) held its IPO, and IPO investors have outperformed the market in the years that have followed.

GrubHub’s Big Debut

Food delivery giant GrubHub was founded in 2004 and made the move to go public 10 years later. It priced its IPO at $26 per share. GrubHub had initially targeted the $20 to $22 range, but robust demand pushed the price up to $26 and allowed GrubHub to raise nearly $200 million by selling 7.4 million shares.

At the time of its IPO, the company was valued at $2 billion.

After selling IPO shares at $26, GrubHub shares hit the ground running, soaring up to $45.80 during the frenzy surrounding its IPO. However, the stock soon ran out of steam due in part to concerns over the slowing revenue growth.

GrubHub shares dropped to their all-time low of $17.17 in early 2016 before beginning a multi-year ramp on the strength of a growth rebound and positive trends in food delivery.

Recent News

GrubHub stock hit its all-time high of $149.35 in 2018, but fears over competition from Uber Technologies Inc (NYSE: UBER), Postmates and other services have weighed on GrubHub shares in recent years.

After the stock dropped as low as $29.35 in early 2020, investors got some huge news when media outlets reported that Uber is interested in a GrubHub buyout. The initial reported buyout price was around $69.66, but a deal is far from done at this point.

2020 And Beyond

GrubHub shares are currently trading at around $59, an 18% discount to the proposed buyout price.

At the stock’s current level, $1,000 worth of GrubHub IPO stock in 2014 would be worth about $2,260 today.

Looking ahead, analysts don’t seem particularly optimistic about a buyout in 2020. The average price target among the 21 analysts covering the stock is $49 suggesting 17.1% downside from current levels.

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