CNN — Chipotle’s board announced that it approved a 50-for-1 stock split on Tuesday, which the company called one of the biggest stock splits in New York Stock Exchange history.
That means a single share of Chipotle, worth $2,797.56 as of Tuesday’s stock market close, will be split into 50 smaller shares if the move wins shareholder approval, effectively rolling back the cost of investing in the company.
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NEWPORT BEACH, Calif., March 19, 2024 /PRNEWSWIRE/ -- Chipotle Mexican Grill, Inc. (NYSE: CMG) today announced that its Board of Directors approved a 50-for-one split of its common stock. This would be one of the biggest stock splits in New York Stock Exchange (NYSE) history.
The stock split is subject to shareholder approval of an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of common stock to accommodate the stock split. The company intends to seek shareholder approval for this amendment at its upcoming annual meeting on June 6, 2024.
If the Certificate of Incorporation amendment is approved, shareholders of record as of June 18, 2024 will receive 49 additional shares for each share held, which will be distributed after market close on June 25, 2024. Chipotle's shares are expected to begin trading on a post-split basis at the market open on Wednesday, June 26, 2024.
"This is the first stock split in Chipotle's 30-year history, and we believe this will make our stock more accessible to employees as well as a broader range of investors," said Jack Hartung, Chief Financial and Administrative Officer, Chipotle. "This split comes at a time when our stock is experiencing an all-time high driven by record revenues, profits, and growth."
To commemorate this special event and in recognition of the Company's strong performance, Chipotle announced a special one-time equity grant for all restaurant general managers as well as crew members with more than 20 years of service. "We want to thank our general managers and tenured crew members for their hard work and dedication to Chipotle by providing a one-time equity grant as an additional incentive to continue delivering outstanding results and share in the financial success of our Company," said Brian Niccol, Chairman and CEO, Chipotle.
Source: https://newsroom.chipotle.com/2024-03-19-CHIPOTLE-BOARD-OF-DIRECTORS-APPROVES-50-FOR-1-STOCK-SPLIT
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Chipotle Mexican Grill (CMG) said on Tuesday its board had approved a 50-for-1 split of its common stock. If approved, shareholders of record as of June 18 will get 49 additional shares for each share held. The current price of Chipotle is $2797. After a split $2797 becomes $55.94.
This is a very unusual stock split since it has such a high ratio, 50 to 1. According to investopedia:
"When a stock splits, it can also result in a share price increase—even though there may be a decrease immediately after the stock split. This is because small investors may perceive the stock as more affordable and buy the stock. This effectively boosts demand for the stock and drives up prices. "
Many people swear by trading these stock split announcements. There are many strategies:
Buy right after the announcement and hold until the split occurs
Buy right after the announcement and hold until a profit target is reached or the split occurs.
Wait for a dip in the stock between the time of announcement and the split occurs.
Buy just before the split occurs and hold until a few days after the split occurs.
Sell short right after the split occurs and hold for a few days before Closing the transaction.
Do nothing. This is the safe play. Nothing wrong with staying safe.
Do you have any thoughts on this.
Chipotle Stats:
| Price Earnings ratio | 63 | |
|---|---|---|
| Dividend | 0% | |
| Price Sales ratio | 7.8 | |
| Revenue (Quarterly YoY Growth) | 15.4% |
Any ideas on Chipotle's stock split? I did some analysis using Scalar Field io, and it could be a good opportunity to buy some puts. Any thoughts? Here is what I tried -- https://scalarfield.io/analysis/63f1c8ed-f3f3-4338-881b-e5dba37e3872
I've been thinking the same thing, I'm assuming the $CMG spit will be a "buy the news, sell the event"
However, I'm not sure if it will happen right after the split or if it'll be after earnings in July, but $CMG is definitely not a stock to be long-term bearish on lol
Edit: Any idea what strike or expiration you're looking at?
Most stock splits are bullish. It makes the stock more affordable for retail investors. Any puts you buy will have their strike price adjusted according to the split rules, so you don't gain from the drop in price on your puts due to the split.
Im not sure if this is the place to ask this but the expensive Chipotle stock is about to split next week. There is active social media exposure of skimping quantities yet the stock is all time high. How does this work??
stock splits typically happen when a price gets too high “high”. it’s really all a show;
the goal is to make the investment seem more appealing. too high of a share price = the illusion that it’s overvalued, too expensive etc.
3k stock price is actually surprisingly high, NVDA just had a split at 1k. surprised chipotle is just now doing it.
if anything the stock split will help their value in terms of stock price
People are still going there. I took a chance to use the free double protein rewards and went and left 2 seconds later cause of the line. I didn't have time to wait.
So yea I will still support the anti-skimping movement BUT I'm also loading up on the stock once it splits cause of the people who will just keep eating there.
As title. I’m having surprising difficulty in finding information on this.
The announcement states stockholders on record as of June 18 will receive 49 shares on June 25.
What if I’m a seller and sold my shares between 19-24? Do I still get 49 shares?
What if I’m a buyer who bought between 19-24? Do I just get screwed out of 98% of my equity on the 25th?
The implications here is much more drastic than ex-dividend date.
Do you think it will continue to fall at the rate it is? There are earnings announcements on the 24th (2 days)
Do you think it's worth buying calls or do you think it would be wise to short it based on where it's currently and and it's general trend?
Has anyone purchased Stock Slices for CMG (Chipotle)? Just curious.
I'm waiting on the price to go down a little to buy before that early June date, but I thought buy a slice maybe....
How are we feeing about the upcoming split? Stock has basically cally doubled in price in the past year, and IMO every time a company splits the stock drops slightly at first. To me, seems like a good time for shorting chipotle for the 6/26 50 to 1 split.
Am i the only one thinking this? Im placing puts, just wondering if im absolutely insane. Well… after 6/26, ill see yall here with wither a huge gain or loss. Good luck everyone
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Hi guys. Had some positive feedback on my IBRX post a month ago , and it motivated me to post about another idea I had for Chipotle and its 50-1 split trading next week. A 50-1 split is kinda rare. SP is going from 3300 ish to 65-70 bucks.
The record date for the split was the 18th , and the stock trades on the split basis on the 26th. I saw the stock was down almost 5% Thursday. I thought it was weird it was still trading at all if the record date for a split was the 18th...
I called Fidelity to ask about that since it seemed weird the stock was trading in the mean time and they were not gonna just say "ok your shares are 70 bucks now too bad". The rep at Fidelity had to take some time to look as he said it was an excellent question! He came back after about 10 minutes and assured me as long as you own the stock by the 25th , you will get the split shares on open the 26th. Check with your broker to make sure but the following will work for Fidelity at least.
You could buy 2 shares of CMG on Monday or Tuesday. Will likely cost you around 6600-6700 depending.
On Wednesday CMG trades on the 50-1 split adjusted basis. You will now have 100 shares at 65-70 depending.
Sell a covered OTM call. Pick a strike at least 10% above the SP at open on the 26th.
So you pocket whatever premium and timeframe you are happy with , and wait. I am betting there will be at least 10% appreciation post split. Everyone loves Chipotle and it shows. The business is booming. So you will make money with premiums and share appreciation. If the shares get called , boo hoo. As long as your not too close to ITM when you sold the call the $ from the sale plus the premium should leave you with enough to rebuy 100 shares and sell another call. Rinse and repeat. After a bit you will see what you can pull out of it weekly/monthly without getting exercised too much. Then you use premiums for more shares till you have 200. Now you can sell 2 contracts at a time. See where I am going with this?
If you don't have the almost 7k to throw at this , you can also simply wait till the 26th and buy calls ATM or ITM at open. After something like a 50-1 split , I think it has a lot of upside for at least Thursday and Friday.
That's all I have right now. Thanks for reading my post! If anyone has anything to add I would love to see it in the comments. I think this is a pretty solid play but I am no expert so if anyone smarter than me sees something i missed please chime in.
What happens when there is a 50:1 stock split? Fundamentally, more people have the ability to buy puts/calls because they become cheaper. Yes the options themselves are smaller, but there are so many regards that it doesn’t matter. Therefore, I’m pretty confident we will be able to swing it pretty heavily.
My first anti-chipotle “shitpost” got a surprising amount of support, so, it seems like this is actually a pretty divisive issue. Thats a case for the volatility,
And now, we come to the question.. should we try to make it go up or go down?
Well, let me ask you my fellow ape, does chipotle deserve more of our money? Or do we want to teach them a lesson? To me the answer is clear. We must destroy chipotle as they are becoming too cocky with their endgame corporate power over us plebs trying to get a well-portioned burrito. Fuck em. Simple as that. We don't need any other reason.
Either way, I think straddles are the best play coming up. But if you got big balls and want to stick to your ideals, its puts only.
The stock splits on June 25th. Do with that information what you will. Personally I have some puts expiring July 19th. Details in comments.