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Chipotle’s Shares Surge Following Announcement Of 50-to-1 Stock Split

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Chipotle Mexican Grill (CMG) saw a surge in premarket trading on Wednesday after announcing a groundbreaking 50-for-1 stock split, aimed at enhancing accessibility for employees and a wider investor base.

The Newport Beach, California-based company unveiled its plan for the historic split, marking the first such move in its 30-year history, with intentions to seek shareholder approval at its upcoming annual meeting scheduled for June 6.

Pending approval, shareholders would receive an additional 49 shares for each Chipotle share held as of the record date on June 18, with the supplementary shares set to be distributed after market close on June 25. Trading on a post-split basis would commence the following day.

With Tuesday’s closing price of $2,797.56, the split would position shares around $55.95 each. Chipotle shares, having surged approximately 75% over the past year, surged by 6.7% to $2,985.00 three hours before Wednesday’s opening bell.

Alongside the split, the company unveiled plans for a one-time equity grant tailored for restaurant general managers and employees with over two decades of service.

In its fourth-quarter report, Chipotle posted a 15.4% revenue uptick from the previous year, accompanied by a 25% increase in adjusted profit, buoyed by robust demand for its burrito and rice bowl offerings.

Looking ahead to 2024, Chipotle foresees mid-single-digit growth in same-store sales percentage.

Following a retracement to the 200-day moving average, Chipotle’s share price has charted a robust upward trajectory, with the projected opening price today marking a new record high. Continued upward momentum suggests potential for higher highs and higher lows, with periodic profit-taking presenting opportunities for investors to consider buy-the-dip strategies, especially around key trendline levels extending back to mid-October lows last year.

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