Chipotle is splitting its stock 50-for-1

Chipotle is splitting its stock shortly after reaching a new 52-week high. Here's what investors need to know.

Transcript

00:00I'm Conway Gittens reporting from the New York Stock Exchange. Here's what we're watching

00:03on the street today. The Nvidia-fueled rally appears to have run out of gas, at least for

00:07now, with all three major averages relatively flat for the day. There was news on the housing

00:14front. Home resales dropped in May, according to the National Association of Realtors. The

00:19median home price hit a new record high of $419,300. Investors will get a barrage of

00:27data next week, along with the Federal Reserve's preferred inflation gauge. In other news, fresh

00:33on the heels of Nvidia's 10-for-1 stock split, Chipotle is doing a 50-for-1 stock split.

00:39That means each Chipotle shareholder will get 50 shares for each one share they hold.

00:45More importantly, the price of each share will go from roughly $3,220 a pop before the

00:51split to just $64 after the split. Chipotle Chief Financial and Administrative Officer

00:58Jack Hartung said in a statement, quote,

01:01We believe this will make our stock more accessible to our employees as well as a broader range

01:06of investors. Stock splits are a tool used by corporations to make a stock more affordable

01:11without making existing shareholders poorer. The more affordable a stock, the more likely

01:17it is to be bought or sold by a greater number of people. There is research that shows that

01:22companies who split their stock typically outperform the benchmarked S&P 500 in the

01:27short term. Shares of Chipotle begin trading at the split-adjusted price on June 26.

01:34And that'll do it for your daily briefing from the New York Stock Exchange. I'm Conway

01:37Gittins with the Street.