Over the past year, Papa John’s is one of the many chain restaurants in the United States that has been suffering. In addition to dwindling sales, the stock price of the pizza joint has been dropping, even though it is the fourth-largest pizza chain in the United States. However, according to a new report, things might be turning around for Papa Johns due to an exciting new possible investment, and the news alone has sent the stock soaring.
Semafor reported late last week that Papa John’s stock spiked as a result of news of a major investment of a member of Qatar’s royal family. According to the report, Irth Capital Management has spoken with advisers about presenting a private bid for Papa Johns and its market cap of roughly $1.6 billion.
Papa John’s stock surged 18.4% on Thursday following the report and are up more than 32% over the past week, getting as high as $53.74 on Thursday. They closed the week at $49.04. It was trading for $38.43 on February 10. However, the brand is still valued far lower than it was just a year ago. The price was $73.03 on February 16, 2024.
The company is founded by Matthew Bradshaw and Sheikh Mohamed “Moe” al Thani. Last year, the Qatari royals disclosed a 4.99 percent stake in Papa Johns, about 1.6 million shares worth about $70 million.
Semafor points out that Bradshaw has a lot of experience revamping businesses. Prior to starting Irth, Bradshaw co-founded Durational Capital, which took Southern fried-chicken joint Bojangles private in 2018 and did the same at mattress company Casper in 2021. Irth “creates many of its own opportunities,” according to its investment brochure.
According to Stephens analyst Jim Salera takeover rumors “could have been the primary driver” of the stock price. However, he also noted that January credit card data did show some improvement in sales during January.
Late last year during an earnings call with investors, CFO Ravi Thanawala said that Papa Johns has been seeing “challenging sales trends” all year, and “we expect they will likely continue as we close out 2024 and enter 2025.” CEO Todd Penegor believes that Papa Johns’ “value perception” among consumers has contributed to its negative sales trends. “I think value perception is a big part of kind of the momentum challenges that we’ve seen in this business,” he said during the call. “We need to make sure that we’re back in the consideration set, first and foremost, to be competitive on price. But we also have to amplify our message around quality and why we’re uniquely different.”
Leah Groth
Leah Groth has decades of experience covering all things health, wellness and fitness related. Read more about Leah
