Why Cava Group Stock Plunged 31% in September
Shares of Cava Group (NYSE: CAVA) dropped 32% in September, according to data provided by S&P Global Market Intelligence. There wasn't any specific news on the newly public company, but hot initial public offering (IPO) stocks often begin to fall after early surges if their valuations become inflated.
Cava was one of the first IPOs this year to catch investor attention, and is still one of the only ones. Last year's bear market ended a streak of IPO fever partly sparked by the emergence of the special purpose acquisition company (SPAC) and a strong, yearslong bear market.
Cava operates a fast-casual restaurant chain focused on midprice Mediterranean fare, and it has been demonstrating impressive growth. It has only 279 restaurants and has a long growth runway in opening new units, in itself a growth driver.
Source Fool.com
