Chipotle (NYSE:CMG) stock could see a major catalyst when June 6 rolls around as the Mexican fast-food chain eyes a stock split.
The Board of Directors at Chipotle has approved a 50-for-1 stock split. Now, it just needs shareholders to vote in favor of the split during a meeting on June 6.
Chipotle Chief Financial and Administrative Officer Jack Hartung said the following about the split:
“This is the first stock split in Chipotle’s 30-year history, and we believe this will make our stock more accessible to employees as well as a broader range of investors […] This split comes at a time when our stock is experiencing an all-time high driven by record revenues, profits, and growth.”
What This Means for CMG Stock
This could be a major win for Chipotle if investors approve the stock split. The company’s shares closed out Tuesday at $2,797.56 apiece. If this split goes into effect, each share will be split into 50 shares.
Enacting such a stock split would drastically lower the price of CMG stock without affecting the company’s market capitalization. This could allow Chipotle to attract new investors who aren’t willing to take a stake in its stock at current values.
CMG stock is up 5.1% as of Wednesday morning and could see further gains if investors approve the share split.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
