Hedge Fund Blogs From HedgeCo.Net


You say Taco Bell I say Chipotle

Executives at Chipotle are no doubt scratching their heads today, wondering what they did to cause $730 Million get sliced off of their market cap at 11:14 in Thursday morning trading.

As the Wall Street Journal put it “You’ve been Einhorned.”

Hedge Fund Manager, David Einhorn was speaking to Value Investing Congress, when he panned Chipotle stock suggesting that “Less long exposure to Chipotle stock is a good idea.” David Einhorn went on to compareĀ  Taco Bell with Chipotle, placing his bets on Taco Bell because they had more locations and cheaper meals.

In less time than it takes a bad taco to wash through your body, the Chipotle stock took a nose-dive, shaving over 5% off the stock price in minutes.

Personally, I prefer Chipotle any day vs. Taco Bell. I, and everyone I know, are well past the age to mindlessly scarf down 89 cent Taco Bell burritos. Chipotle is the Starbucks of Taco places, it serves far better food, and offers a much better experience.

Not to mention clean bathrooms.

It’s unfortunate that characters like Einhorn base their predictions on such flimsy facts. It’s even worse that the market in general reacts so violently to off the cuff remarks granting Einhorn the god-like quality of making self-fulfilling prophecies.

About Aaron Wormus

Aaron Wormus works as the Managing Director of Website Creation at HedgeCo Networks and has worked with HedgeCo since the end of 2004. Prior to working with HedgeCo Networks, Aaron managed a private consulting firm based in Frankfurt, Germany. During this time he worked implementing back-end systems for clients ranging from telecommunications companies to mining companies and Silicon Valley software distributors. Aaron Wormus is a published author who has studied Information Technology and Journalism in Finland. His written work has been published in various technology magazines, translated into 5 European languages, as well as published book. Aaron regularly speaks at PHP Programming conferences, and is involved in the organization of his local technology user group.
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