Shake Shack stock surged around midday Wednesday after Starboard Value CEO Jeff Smith said in an interview with Bloomberg Television that the activist investment firm had taken a stake of several hundred million dollars in the burger chain.

Shares of Shake Shack jumped as much as 10% to roughly $73 after trading as low as $64.35 earlier in the session. The stock closed Tuesday at $66.22. The sharp move extended a smaller premarket gain following the company's better-than-expected second-quarter earnings release.

The midday rally suggests investors viewed Starboard's involvement as a potentially stronger catalyst than the earnings beat alone, particularly as Shake Shack tries to protect traffic and value while navigating stubborn commodity inflation.

Smith has extensive restaurant-sector experience: Starboard led a successful board overhaul at Olive Garden parent Darden Restaurants and has also invested in Papa John's, Bloomin' Brands, and Starbucks.

In the latest quarter ended in June, Shake Shack's adjusted earnings were 43 cents a share, well above the 30 cents analysts surveyed by FactSet expected. Revenue rose 17.2% from a year earlier to $417.6 million, slightly above Wall Street forecasts.

Same-Shack sales increased 3.5%, exceeding the 2.6% consensus estimate, with traffic up 2%. The company said World Cup demand contributed about 0.9 percentage point to comparable sales growth.

Still, restaurant-level profit margin declined to 23% from 23.9% a year ago. Shake Shack blamed record-high beef costs and higher operating expenses, while saying it chose not to offset all inflation with menu-price increases.

Starboard's involvement could raise expectations for pressure on Shake Shack to improve profitability and operations.