Chipotle’s 50-for-1 stock split explained

Chipotle is splitting its stock shortly after reaching a new 52-week high. Here’s what investors need to know.
Transcript:
CONWAY GITTENS: Here’s what we’re watching on TheStreet today.
The Nvidia-fueled NVDA rally appears to have run out of gas - at least for now - with all three major averages relatively flat for the day.
There was news on the housing front. Home resales dropped in May, according to the National Association of Realtors. The median home price hit a new record high of $419,300. Investors will get a barrage of housing data next week, along with the Federal Reserve’s preferred inflation gauge.
In other news: fresh on the heels of Nvidia’s 10-for-1 stock split, Chipotle CMG is doing a 50-for-1 stock split. That means each Chipotle shareholder will get 50 shares for each one share they hold. More importantly, the price of each share will go from roughly $3,220 a pop before the split, to just $64 after the split.
Chipotle chief financial and administrative officer Jack Hartung said in a statement, “We believe this will make our stock more accessible to our employees as well as a broader range of investors.”
Stock splits are a tool used by corporations to make a stock more affordable, without making existing shareholders poorer. The more affordable a stock, the more likely it is to be bought or sold by a greater number of people.
There is research that shows that companies who split their stock typically outperform the benchmark S&P 500 in the short term.
Shares of Chipotle begin trading at the split-adjusted price on June 26th.
That’ll do it for your daily briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet
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