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 compare 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.