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Chipotle Mexican Grill Faces Investor Backlash Amid Stock Split Fallout

by Ivy

Chipotle Mexican Grill (CMG) saw a significant decline in its stock price on Monday, marking it as one of the poorest performers in the S&P 500 index with a drop of more than 5%. This decline follows the waning investor enthusiasm surrounding the company’s recent 50-for-1 stock split.

The fast-food chain’s shares had reached a record closing high on June 18 following shareholder approval of the split, which became effective on June 26. However, since then, the stock has steadily declined, losing approximately 13% of its value as of today’s close.

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Recently, Chipotle has faced criticism alongside other companies for what’s been termed “shrinkflation”—where consumers perceive they are receiving less product for the same price. Some Chipotle customers have expressed concerns about smaller portions in their burrito bowls, with videos circulating on platforms like TikTok showing employees preparing meals.

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Chipotle’s CEO, Brian Niccol, addressed these claims in May during an interview with CNBC, asserting that the company has never engaged in such practices and dismissing the accusations as unfounded.

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Despite Monday’s sell-off driving Chipotle’s stock to its lowest level since April, the company has still managed to increase its value by approximately a third over the course of 2024. This resilience suggests ongoing investor confidence in Chipotle’s long-term growth prospects, despite recent market fluctuations and consumer perceptions.

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