What Are Stock Splits? Why Is Chipotle Doing One?
The practice — which isn't as popular as it once was — is the equivalent of swapping a $10 bill for 10 $1 bills.
Chipotle is planning a 50-to-1 stock split after a roughly 40% rally this year pushed its stock price to more than $3,200 a share.
Photographer: Jeenah Moon/BloombergSometimes a stock flies so high that its price becomes out of reach for the average investor. Chipotle Mexican Grill Inc. is the latest example, after a roughly 40% rally this year pushed its stock price to more than $3,200 a share, a daunting number for many retail investors. So, the fast-casual chain said in March that it would carry out a 50-to-1 stock split, its first ever, to reduce the price of shares and make them more accessible to retail investors and employees. Chipotle's move follows semiconductor makers Nvidia Corp. and Broadcom Inc., which also both recently decided to split their stock after record gains.
Here’s a primer on stock splits: