Why Chipotle Is Prepping for a 50-for-1 CMG Stock Split


  • Chipotle Mexican Grill (CMG) will conduct a 50-for-1 stock split.
  • The news sent the stock up, even though it has no financial meaning.
  • There’s still a whole world for Chipotle to conquer.
CMG stock - Why Chipotle Is Prepping for a 50-for-1 CMG Stock Split

Source: Retail Photographer / Shutterstock.com

Chipotle Mexican Grill (NYSE:CMG) will conduct a 50-for-1 CMG stock split.

While the news has no direct impact on the Mexican bowl-and-wrap chain’s value, it sent CMG stock up 5% overnight. Shares were trading in the pre-market at $2,939 each. The post-split price on those shares would be $59, but the market capitalization remains the same at about $81 billion. The number of shares will increase from 27.42 million to a post-split 1.371 billion.

More Chips, Please

Chipotle came public 18 years ago at $22 per share. It had 3,437 restaurants at the end of 2023, all but 67 in the U.S., and is adding 250 more stores each year.

It hasn’t been an easy rise. The company had a series of scandals related to food handling in the middle of the last decade. This led to the removal of founder Steve Ells in 2017 and his eventual replacement by Brian Niccol.

Niccol’s first move was to dump Ells’ team and move the company from Denver, Colorado, to Newport Beach, California. Then, he put his own team together and got to work.

Niccol, who was hired from YUM! Brands’ (NYSE:YUM) Taco Bell chain added pick-up shelves for online orders, catering packs, and a loyalty program. His timing was exquisite, as the chain became a Covid-era winner.

Its rise is now compared with that of McDonald’s (NYSE:MCD), the irony being that the company was originally a McDonald’s spin-off. Its success has spawned an imitator in Cava (NASDAQ:CAVA), which sells Mediterranean-style bowls and wraps from a similar cafeteria-like line. Since coming public last June, CMG stock is up 70%.

CMG Stock: What Happens Next?

Chipotle has changed the game in fast food, but it can grow much further. McDonald’s has 40,000 restaurants, and Chipotle has barely begun to grow outside the U.S.

On the date of publication, Dana Blankenhorn 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

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon or subscribe to his Substack.

Article printed from InvestorPlace Media, https://investorplace.com/2024/03/why-chipotle-is-prepping-for-a-50-for-1-cmg-stock-split/.

©2024 InvestorPlace Media, LLC