Chipotle Has 1 of the Biggest Stock Splits in New York Stock Exchange History. Here's Why I'm Still Not Buying It.

Fast food chain Chipotle Mexican Grill (NYSE: CMG) recently announced one of the largest stock splits in the New York stock Exchange's history. The company's shares will be sliced up 50-to-1, resetting the stock's share price to roughly $57 per share. The split will go into effect in a few months.

By some measures, the stock split is already a smashing success. Chipotle's stock has been up since the announcement. However, I'm standing happily on the sidelines. Here is why I'm not buying Chipotle's monumental stock split.

Investors love stock splits, and company employees love stock splits. Why is that? Well, it's for different reasons. A stock split lowers a stock's share price by proportionately increasing the number of outstanding shares. In other words, Chipotle's current share price of $2,880 will be divided by 50, and the quantity of shares will increase 50-fold.

Continue reading


Source Fool.com