Chipotle Stocks Split For The First Time, Breaking $3,000

(CTN News) – Chipotle Mexican Grill’s stock breached the $3,000 mark for the first time on record on Wednesday, following the approval of a 50-for-1 stock split by its board aimed at making the stock more affordable for investors.

Over the past year, shares of the California-based company have surged to record highs due to strong demand for burritos and rice bowls among its relatively wealthy customers.

Stock splits reduce share prices without affecting a Chipotle company’s valuation, allowing investors to purchase them at a more affordable price.

On the basis of Tuesday’s closing price of $2,797.56, the company’s stock would trade at approximately $56 following the split. The company is estimated to have 27.4 million outstanding shares.

Its shareholders will receive an additional 49 shares for every share they hold if the split is approved at the company’s upcoming annual meeting on June 6.

Among the S&P 500 companies, Chipotle had the fourth-highest stock value per share as of Tuesday’s close. The company had a $76.71 billion market value.

Chipotle’s Chief Financial and Administrative Officer Jack Hartung commented on Tuesday that the first stock split in the company’s history “will make our stock more accessible to employees as well as a broader range of investors.”

Thomas Hayes, chairman of hedge fund Great Hill Capital, said, “They’re also trying to emulate Walmart by giving employees more economic ownership.”

A three-for-one share split at retail giant Walmart took effect on Feb. 26, making the stock more affordable for Walmart’s employees, who are able to purchase the stock through payroll deductions.

According to Jim Sanderson, an analyst with Northcoast Research, the stock split of Chipotle should ease liquidity in the stock given how high the share price has risen over the past few years. Otherwise, the business economics remain strong.

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