Chipotle Soars on Announcement of 50-for-1 Stock Split

Chipotle Mexican Grill (CMG) stock flew high today after the company announced a dramatic 50-for-1 stock split. The decision, which requires shareholder approval at their upcoming June 6th meeting, sent the share price surging in pre-market trading.

This marks Chipotle’s first-ever stock split, and it’s a significant one. If approved, each shareholder on record by June 18th will receive 49 additional shares for every share they currently own. The move is expected to make the stock more affordable for individual investors, broadening the appeal of Chipotle ownership.

Chipotle’s stock has been on a tear over the past year, climbing over 72%. The high share price, currently hovering around $3,000, can be a barrier for some investors.

“This will make our stock more accessible to employees as well as a broader range of investors,” said Chipotle Chief Financial Officer (CFO) Jack Hartung in a press release. The company also plans to offer a special equity grant for restaurant general managers and long-term employees, further emphasizing their commitment to employee ownership.

The stock split itself doesn’t change the underlying value of the company. However, the increased accessibility could lead to higher trading volume and potentially even a higher stock price in the long run. Analysts will be watching closely to see if the split attracts the desired effect of a wider investor base.

In the meantime, Chipotle is basking in the positive response to the news. The stock is expected to begin trading on a split-adjusted basis by June 26th, marking a significant milestone for the popular burrito chain.