Chipotle stock jumps after announcing 50-for-1 stock split
Shares of Chipotle Mexican Grill (CMG) jumped Wednesday after announcing its board approved a 50-for-1 stock split. However, shareholders will have to approve the move at the company's annual meeting on June 6. The stock peaked intraday, shooting above an all-time high of $3,000 per share before fluttering lower just above $2,900 ahead of the market close.
Yahoo Finance Live weighs in on the trajectory of Chipotle's stock and how much room it may have to run higher if this stock split is ultimately approved by shareholders.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Stephanie Mikulich and updated by Luke Carberry Mogan.
Video Transcript
- Taking a look now at shares of Chipotle the board of the fast casual restaurant chain. Approving a 50 for one stock split. And look at that nice little 4% pop today, Julie. So that was the news that Chipotle's board proposing. A 50 to 1 stock split. First split in this company's history of course. The stock goes public back in 2006 at 22. Now trades for around 3,000.
- Not a bad return.
- Not bad for burrito chain. Shareholders I guess, are going to be asked to approve the split at this annual meeting in June 6. And the split shares would then start trading on June 26.
- Yes. And what we like to say about a split is that, the pros don't necessarily like this. It doesn't do anything for the fundamental value of the company. It's more a move aimed at retail investors. Who can better wrap their brain around buying something that is not 2,900 bucks a pop. But rather is a 50th of that.
- Yeah.
- And so that's why you see these kinds of moves. There have been fewer stock splits recently. But we have seen companies like Walmart do them also-- trying to pour retail investors. And so it's interesting to see that positive reaction in today's shares.
- Yeah. Also saw Chipotle by the way also given a one time equity grant to restaurant general managers and crew members.
- Yes
- Who worked there for more than 20 years. And I saw some analysts saying that, to them this was kind of a positive signal. Speaking to management confidence.
- You are the last man in America who has not had Chipotle.
- I really have to try this--
- Maybe there's other people out there. If you are out there please tweet at me.
- I want to make it clear.
- I think he's the only guy.
- I want to make it clear. I'm not anti Chipotle. I just haven't sampled it yet. Not that I can remember. Although more we're talking about right now, the hungry I'm getting. So that's a good sign.
- I'm sorry we shouldn't talk about it anymore then.
