Burger King IPO gain not a whopper
 

Burger King Holdings Inc., the world's second-largest hamburger chain, served up a 3 percent gain Thursday in its market debut, despite a broader market slump.

The initial public offering of 25 million shares, which represents a 19 percent stake in the company, was worth about $425 million.

Burger King, which plans to use most of the proceeds to pay off a loan for a special dividend for its private equity fund owners, was the fourth restaurant IPO this year.

Burger King (up $0.50 to $17.50, Research) shares rose 2.9 percent, trimming earlier gains of up to 7 percent as broader market gauges slipped for the sixth time in the last seven sessions.

On Wednesday, the shares priced at $17, at the high end of the expected range.

The stock's rise was significantly smaller than in recent restaurant IPOs from Chipotle Mexican Grill Inc. (Research), shares of which doubled in their January market debut, and Tim Hortons Inc. (Research), stock of which soared over 20 percent in its first day of trading in March.

"I'm surprised it's not higher," Sal Morreale, who tracks IPOs for Cantor Fitzgerald in Los Angeles, said of Burger King's stock performance. "I heard from a lot of people yesterday that the deal was heavily oversubscribed. You have a market that's on a tightrope."

Among 88 IPO deals this year before Burger King, the average first-day gain was 8.9 percent, according to Dealogic.