CMG - Chipotle Just Split Its Stock 50-for-1. Here's What Investors Need to Know.
2024-06-27 08:25:00 ET
Chipotle (NYSE: CMG) has officially joined the stock split club after shares began trading at a fiftieth of their previous price. If you're a shareholder, don't panic. You'll notice you have 50 times the shares you used to have. It's essentially a wash in terms of net value for your portfolio.
So why did Chipotle do this? A forward split allows a company to make its shares accessible to a wider audience. For many retail traders, the more than $3,000 price tag that shares carried just a day ago was too steep. They were effectively locked out of the ability to invest. As Chipotle's CFO noted, this is true for a lot of employees of Chipotle. Reducing the stock price allows for buy-in from employees on the ground floor.
Although the move doesn't in and of itself change your portfolio value, it may have a positive effect on the stock price over time. Forward splits are often followed by upward movement in the stock price, but it's hard to say if it's just a coincidence, given that many forward stock splits happen when a stock already has positive momentum behind it.
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Chipotle Just Split Its Stock 50-for-1. Here's What Investors Need to Know.