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What investors should know about Chipotle's stock split: YF Explains

Chipotle Mexican Grill (CMG) shares could be on the path to a 50-for-1 stock split in June: while the fast-casual chain's board of directors approved the split, shareholders still have to vote on the move.

Yahoo Finance Retail Reporter Brooke DiPalma joins Wealth! to explain the dynamics of a stock split, what it means for current Chipotle shareholders, and how employees can take advantage of these benefits to own a piece of the company.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

BRAD SMITH: So you want to talk about stock splits. You're not alone. We're hearing more companies announcing them. And investors now eagerly awaiting Chipotle's 50 for 1 split. But what exactly does this mean for shareholders and new investors looking to jump in on some of that action?

"Yahoo Finance" reporter Brooke DiPalma has the details on this for us.

BROOKE DIPALMA: Good morning, Brad. For those new investors who are unaware of what a stock split is, let's start there. So companies, typically, conduct a stock split to make shares more accessible to employees or to a broader range of investors at, key this, a lower price point.

Now, it also typically happens when a company is performing well. The CEO of Chipotle told "Yahoo Finance," it is achieving things that it set out for in its vision statements and making it a reality. Now, the company is also experiencing an all-time high driven by record revenues, profit, and growth.

And right now, as you can see here, shares are hovering over $2,800 per share. Now, the stock split was approved by Chipotle's board, but needs to get shareholder approval come June. It will then begin trading on a post-split basis on June 26.

But Chipotle is not alone here. Other companies have done this. Most recently, Walmart announced a 3 for 1 stock split. Their executives also said that it wanted to have employees be able to own a piece of the company. And Google parent company Alphabet, as well as, Amazon, they announced a 20 for 1 stock split back in 2022.

And if you're an employee at Chipotle or elsewhere, and you want to jump in on action here, start with your employer first. See if you're able to learn more about opportunities in the market like this.

And according to MetLife, 54% of employees, actually, offer financial planning and education workshops. So start with your employer first and start asking questions. Back to you, Brad.

BRAD SMITH: Brooke, I just want 50 pieces of chicken for one burrito bowl. That's all I'm looking for out there. I don't have to keep saying extra chicken, if that's the case.

Anyway, Brooke, thanks so much for breaking this down for us. Appreciate it.