All directors shareholders disappointed by Chipotle slide
All directors shareholders disappointed by Chipotle slide: Ackman’s Pershing Square Capital Management holds a 10 percent stake, making the hedge fund the largest investor in the fast-casual burrito chain.
“There is not a member of the board of directors; there is not a member of management; there is not a shareholder of the company who isn’t disappointed with the progress of the company so far,” Ackman said in an interview with Reuters in Boston.
Chipotle on Tuesday posted lower-than-expected earnings and said it would open fewer restaurants than previously planned over the coming year, news that sent its shares down 14.6 percent to close at $277.01 on the New York Stock Exchange.
Ackman declined further comment on the company. His fund’s stake in Chipotle lost about $145 million in value in Wednesday’s slide.
The billionaire investor in May described Chipotle Chief Executive Steve Ells as “outstanding.” Ells was made sole chief executive in December when Pershing Square also received two board seats.
Ackman has a been involved with a number of companies where chief executives have lost their positions soon after he arrived on the scene including Canadian Pacific and Air Products.
Chipotle’s sales swooned in November 2015 when the chain was linked to a multi-state E. coli outbreak and went into free fall in December 2016 after at least 80 Boston College students were sickened by norovirus traced to a Chipotle restaurant.
Ackman signaled that he was not worried about the safety of Chipotle’s burritos, tacos and salads, noting that he had eaten lunch at the chain on Wednesday.
“The entire investment team is going to be eating Chipotle until the stock price is back at $500,” he joked.
Source:http://www.reuters.com/article/us-hedgefunds-ackman-chipotle/ackman-all-directors-shareholders-disappointed-by-chipotle-slide-idUSKBN1CV01D
