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Has Chipotle Stock Split in 2024?
Yes, Chipotle Mexican Grill carried out one of the largest stock splits on record with a mammoth 50-for-1 split on June 26, 2024.
The CMG stock price surged as Chipotle Stock split rumors were confirmed by the Chipotle Board in the first half of 2024.
However, the split appears to have called the top in the stock, at least in the near term, with a significant decline since the record high notched in June.
Keep reading to learn what happened and whether the post-split drop in the CMG share price could offer an investment opportunity.
Key Takeaways
- Chipotle’s first stock split in June 2024 made CMG shares much more affordable, dropping the price from over $3,000 to around $66.
- The split boosted liquidity and accessibility, attracting more retail investors, but didn’t change the company’s overall value.
- Post-split volatility saw the stock decline after its June high, largely driven by speculative activity.
- The split had no impact on earnings or ownership value, only changing the number of shares without affecting shareholder equity.
When Has the Chipotle Stock Split?
The last Chipotle stock split was on June 26, 2024, in a 50-for-1 division that left every shareholder that owns one share with fifty new lower priced CMG shares. This was the restaurant company’s first and only stock split to date.
The split reduced its share price from approximately $3,283 to around $66 per share post-split.
For comparison, the last Tesla stock split was a 3-for-1, with the only previous TSLA stock split being an atypically large 7-for-1.
The huge size of the Chipotle stock split can be explained by the explosive growth in GMG stocks since its IPO.
As of September 26, 2024, Chipotle’s stock is up approximately 6,042.68% since going public in 2006, adjusted for the 50-for-1 stock split.
What to Expect From the Chipotle Stock Split
The 50-for-1 stock split from Chipotle instantly made its shares a lot more accessible. Before the split, each Chipotle share was trading at a lofty $3,283. Then, all-of-a-sudden, post-split, those same shares were priced around $66. It didn’t change the company’s value, but it certainly made the stock more affordable for the average investor.
But don’t get too excited; the value of your holdings doesn’t change. Think of it like swapping a $50 bill for fifty $1 bills – that’s to say, your total amount of money is the same, just broken down into smaller parts.
The critical takeaway is that Chipotle’s market cap, revenues, and earnings per share (EPS) remain unchanged by this event. All that’s really happened is a redistribution of the shares to make them more wallet-friendly. This move makes the stock easier for retail investors to buy without needing thousands of dollars upfront while also boosting liquidity in the market.
The split itself doesn’t create value, making any Chipotle stock split prediction off the back of it hard to do, but it certainly opens the door for new investors who now find the stock price less intimidating.
Chipotle Stock Split History
How Many Times Has Chipotle Stock Split?
Chipotle waited a long time – 18 years to be precise – before completing its first and only stock split on June 26, 2024. There has been no prior stock splits, despite rumors flying that the one was needed after such a large rise in the share price.
- Chipotle’s last stock split: June 26, 2024
- The Chipotle stock price before the split: $3,283
- The Chipotle stock price after the split: $66
Although it is a relatively young company, the number of splits over Chipotle’s history is on the low side. For example, Microsoft split its stock nine times since 1987, while Apple had a stock split five times in nearly 40 years.
Will Chipotle’s Stock Split Benefit Investors?
No, over the long run, the CMG stock split will likely have no positive or negative impact for investors.
How Does Chipotle Stock Split Impact the Stock Price?
Since the date of the Chipotle stock split, the stock has experienced a decline from the all-time high reached in mid-June.
This decline was notable, as excitement around the split initially drove up the stock price but began to fade shortly afterward.
It’s worth reiterating that a stock split neither creates nor destroys a company’s fundamental value. It is a purely mathematical piece of financial engineering.
Despite this, there is a perception among investors – based on recent reactions to other stocks before and after stock splits – that there is an investing opportunity. As such, Chipotle stock had a giant run-up, in part over expectations for a split, in the first half of 2024, only to give back much of those gains once the split was completed.
Arguably, with the speculative activity around the split out of the way, the stock is trading closer to its intrinsic value.
What Is a Stock Split?
A stock split is a mathematical operation performed by a company to increase its number of outstanding shares and boost liquidity and affordability for retail investors.
Why Are They Important to Investors?
A stock split makes shares much more affordable, opening it up to smaller investors. This lower price often boosts trading activity and liquidity, making it easier to buy and sell shares in smaller amounts.
Psychologically, the lower price might attract more buyers even though the company’s overall value hasn’t changed. Importantly, the split doesn’t affect earnings or dividends because you still own the same proportion of the company as before.
However, the split may draw in short-term traders, which can lead to increased volatility.
The Bottom Line
In conclusion, Chipotle’s 50-for-1 stock split has made its shares more accessible and improved liquidity without actually changing the fundamentals of the business.
With the pre and post split activity behind us, investors should not expect any immediate changes in the value of their holdings, but over time, the increased accessibility may boost demand and further benefit long-term shareholders.
