Chipotle announces 50-for-1 stock split

Chipotle will grant shareholders 50 shares for each share they own on June 25th. | Photo courtesy of Chipotle Mexican Grill.

The value of Chipotle’s stock rose so much that the company decided to split its stock into 50 companies.

The Newport Beach, Calif.-based Mexican chain announced Tuesday a 50-for-1 stock split, the first stock split in its history. If approved by shareholders at its annual meeting on June 6, it would be one of the largest stock splits in New York Stock Exchange history, the company said.

Shareholders as of June 18th will receive 50 shares for each share held on June 25th. In the process, the price per share will be reduced by 50 shares. For example, at $2,800, the price per share is approximately $56. The value of the company remains the same because the number of outstanding shares that can be traded increases.

Chipotle also said it plans to give one-time stock grants to general managers and employees who have been with the company for 20 years or more.

The 3,400-car fast-casual chain has been one of the industry’s biggest success stories on Wall Street since McDonald’s spun off in an IPO in 2006. The chain’s stock price went public at $22, and he doubled on the first day of trading.

A $1,000 investment in Chipotle at IPO prices is now worth $127,162.

Chipotle’s stock has hit record highs this year as it has generated strong sales, earnings and profitability. The company announced in February that same-store sales increased 8.4% in the fourth quarter. Last year’s restaurant-level operating margin was 26.2% of sales.

“We believe this will make our stock more accessible to a wide range of investors, not just our employees,” Chief Financial Officer Jack Hartung said in a statement.

In fact, by pricing the stock in the $50s to $60s, rather than the $2,800s, it could be available to small investors, including employees and many of Chipotle’s younger customers and fans, to buy the stock.

Regarding the stock grant, CEO Brian Nicol said the grant recognizes the “hard work and dedication to Chipotle” of the general manager and long-time employees, and “helps us continue to deliver great results.” The aim is to provide “additional incentives for

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