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Chipotle Mexican Grill (NYSE:CMG) edged higher on Tuesday, just ahead of the restaurant company’s 50-for-1 stock split that becomes effective after the closing bell. The stock split will be one of the biggest stock splits in New York Stock Exchange history.
“We believe the stock split will make our stock more accessible to our employees as well as a broader range of investors,” stated Chipotle (CMG) CFO Jack Hartung when the split was first announced.
The fast-casual chain also said it planned to offer a special one-time equity gran to general managers and employees with more than 20 years at Chipotle to promote employee ownership of the stock.
Interestingly, Newport Beach-based Chipotle (CMG) has never fired off a stock split since going public in 2006. With its IPO, the company offered 9 million shares to the public, with 3 million shares coming from its majority shareholder, McDonald’s Corporation (MCD). The shares were priced between $15.50 and $17.50 each, and the IPO was underwritten by Morgan Stanley and SG Cowen. Due to high demand, the share price was increased twice before the IPO. The IPO was a significant success, with shares closing at $44 on the first day of trading, doubling the initial offering price.
Shares of Chipotle (CMG) were up 1.75% at 1:45 p.m. On a year-to-date basis, the restaurant stock is up more than 40%.