CHICAGO — Investors filled up on shares of GrubHub in the company's first day of trading.
GrubHub shares rose as high as $40.80 on Friday and ended up 31%, at $34. The Chicago company's gains came even as the overall stock market fell, with the Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq composite all posting declines.
At $34 a share, the online food ordering service is worth about $2.67 billion, or roughly half as much as Groupon Inc., the Chicago daily deals company. Groupon's shares have tumbled since their 2011 debut, when they also soared 31% in their first day of trading.
GrubHub coordinates takeout and delivery orders for thousands of independent restaurants. Now, with the proceeds from its IPO, GrubHub needs to prove that it has the long-term growth that investors crave.
Matt Maloney, GrubHub's chief executive and co-founder, said the company will try to grab a bigger portion of the estimated $70 billion that people spend annually on pickup and delivery. More of that spending is moving online, "and we've seen it for the past few years in our growth numbers," Maloney said. GrubHub also aims to bring out new products that drive more diners to use its services.
GrubHub's 31% first-day gain surpassed the average gains of 18% for U.S. initial public offerings so far this year, according to Dealogic. Still, such soaring prices are far from the big jumps seen in 2000, when the average one-day pop was 53%.
The appetite for GrubHub was apparent earlier in the week as the company set its IPO price at $26 a share, after raising the range to $23 to $25 from a prior target of $20 to $22. Investors also sold more shares than they initially planned.
GrubHub's IPO followed the company's merger with New York-based rival Seamless in August.
At $26 a share, GrubHub's offering raised about $193 million for the company and selling shareholders.