Chipotle’s 50-for-1 Stock Split Takes Effect: Takeaways

Chipotle Mexican Grill’s (CMG) highly anticipated 50-for-1 stock split officially went into effect Wednesday, marking a historic moment for the popular fast-casual restaurant chain and its investors. Under the terms of this split, shareholders received 49 additional shares for each share they previously owned.

Yahoo Finance’s Brooke DiPalma breaks down the details and compares Chipotle’s stock allocation to other notable stocks.

For more expert insights and the latest market action, click here to watch this full episode of Morning Brief.

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Video transcription

Well, Chipotle’s 50-for-one stock split is officially in effect.

This is the burrito giant’s first stock split and one of the largest ever in the history of the New York Stock Exchange.

Yahoo finance Brook to Palma is here with everything you need to know.

Hi, Brook.

Yeah, hello, shares are down this morning about 3% of the stock.

But this morning, shares of a were above $3,200 as of Tuesday’s market close.

Now, shares are trading around $64 per share after the company issued an additional 49 shares per share held at market close on June 18.

Now, three factors to note here, one that makes the stock more accessible to investors and employees of the company.

On the other hand, one expert warned that equity financing could be exposed a little more to a certain level of stock price volatility.

Finally, stock splits are purely cosmetic and have no impact on fundamentals, but they are largely a sign of confidence on the part of the company.

Stocks also tend to generate higher returns after stock splits year-to-date.

Chipotle shares before the market opened were up about 40%.

If you take a look at another company that has also made a stock market move, but earlier this year, shares of Wal Mart, the retail giant, were up about 11% since the start of the year. year during the last three months or rather during the last three months following the completion of his action.

But in February, that’s compared to the S&P 500 which was only up about 5%.

All right. Alright, Brooke, thank you so much for explaining this to us again.

Chipotle, a stock to watch here during today’s trading day.