Unaffordable Stocks to Be Sold At a Low Price: Chipotle Mexican Grill
Chipotle Mexican Grill Inc (CMG) seeks to attract more small investors by approving a 50-for-1 stock split. The burrito chain never did it before in its history, since it launched its IPO (initial public offering) in January 2006 at only $22 per share. Now, Chipotle Mexican Grill's stock price touched $3,000 per share on March 20, after nearly doubling its market value for the last 12 months. A spectacular success among other restaurant segment companies and large income for its faithful shareholders for many years, yet few private traders can handle such an expensive part for only one company in their portfolios, and so many just prefer to skip the CMG option. Who has extra $3,000 for Mexican food on a trading account? This is why the amount of those investors is much less compared to the number of rice bowl eaters and lovers of tacos. Chipotle's board is ready to fix the problem. This split would happen at the moment when the stock is "experiencing an all-time high driven by record revenues, profits, and growth," Jack Hartung, its CFO argued. He hopes the move would make CMG stock accessible to the chain's own employees and "a broader range of investors". Each CMG investor as of June 18, 2024 would get 49 additional shares for each share held. And the split shares for new attracted investors will be done after the Wall St closes on June 25, 2024. So, everybody would be able to purchase some stake in Chipotle Mexican Grill, starting from $60 or maybe a little more, depending on the post-split quotes of the company at that moment.
The Chipotle Mexican Grill stock was trading around $2,800 before the opening bell on March 19, when the split announcement came immediately sending the price to a new range between $2,900 and $3,000. CMG shares may continue to rally, especially after the split would be accomplished, to hit fresh record levels propelled by the current bullish sentiment. Such expectations are based on strong earnings due to a solid demand in more than 3,400 locations only across the United States. Chipotle Mexican Grill forecasted a 34.4% YoY growth for the current fiscal year and may become a top pick for growth investors at a low cost price soon. In early February 2024, CMG beat consensus numbers once again in both top and bottom lines, while projecting its full year comparable sales growth in the mid-single digit range.
A brief but eventful history. In 1993, the first Chipotle Mexican Grill opened in Denver, Colorado. In 1998, the first restaurant outside of Colorado started in Kansas. In the same year, McDonald's became a minority investor in the company to become Chipotle's largest investor by 2001. The business expanded to over 500 food points in 2005. In October 2006, McDonald's fully divested from Chipotle, as a part of a larger initiative to divest its non-core business restaurants. Ironically, some twenty years after this, Chipotle Mexican Grill shares may become a part of almost every investment portfolio.
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