On Tuesday, Chipotle Mexican Grill said it will seek shareholder approval for a stock split of 50-to-1 at their annual meeting on June 6.
Chipotle also plans to offer a special one-time equity grant for restaurant general managers and employees with more than 20 years of service.
"(T)his will make our stock more accessible to employees as well as a broader range of investors," Chipotle Chief Financial Officer (CFO) Jack Hartung said in a press release. "This split comes at a time when our stock is experiencing an all-time high driven by record revenues, profits, and growth," he added.
Analysts believe the share price will find support from buy-the-dip investors near a five-month trendline.
The value of Chipotle Mexican Grill shares jumped in premarket trading on Wednesday after the company announced approval of the stock split by its board, which will make shares more accessible to staff and the general public.
If the deal goes through, shareholders will get an additional 49 shares for each Chipotle share they have as of record date of June 18. Extra shares will be distributed after the closing bell near the end of June.
Based on the stock's Tuesday closing price of $2,797.56, the split would place the shares around $55.95 each. Chipotle shares, which have gained about 75% over the past 12 months, were up 6.7% at $2,985.00 before Wednesday's opening bell.
In the fourth quarter, Chipotle reported a 15.4% jump in revenue from a year earlier while its adjusted profit in the period grew 25%, boosted by strong demand for its burrito and rice bowl menu options.
