On June 26, Chipotle Mexican Grill (CMG) is undertaking a 50-for-1 stock split, one of the largest such transactions in the New York Stock Exchange’s history.
It is the first ever stock split for Chipotle and will take its share price down from $3,210 U.S. to $64.20 U.S. based on the most recent closing price of the shares.
The stock split doesn’t change the fundamentals or underlying value of Chipotle’s stock, but it will make the shares more accessible to investors who previously couldn’t afford them.
Chipotle is also using the stock split to reward long-term employees. The company has said that
it is providing a special equity grant for all restaurant general managers and crew members that have been with the company for more than 20 years.
Management hasn’t said exactly how many shares will be granted to long-serving employees.
Chipotle’s stock has been a long-term winner, leading to its share price rising above $3,000 U.S. The company has consistently posted strong same-store sales and grown its retail network.
In this year’s first quarter alone, Chipotle reported that its sales rose 14% year-over-year, while its net income increased more than 20%.
Since Chipotle announced the stock split in March of this year, the company’s share price has risen 23%. Over the past year, the company’s stock has gained 58%.
While Chipotle’s stock split is the biggest of the year, the company is not alone in splitting its stock.
Walmart (WMT) split its shares 3-for-1 in February of this year, while Nvidia (NVDA) stock just split on a 10-for-1 basis.
Additionally, Williams-Sonoma (WSM) has announced an upcoming 2-for-1 stock split set to take place on July 9, and Broadcom (AVGO) is splitting its stock 10-to-1 on July 15.
