Steve Ells had a vision, and with an $85,000 loan from his father, he set out to make it a reality. With only 107 burritos to sell per day to break even, Ells quickly exceeded that goal and saw Chipotle Mexican Grill take off. What started as a small dream turned into a nationwide success story.
When McDonald’s became involved, Chipotle’s growth skyrocketed. In just eight years, the chain expanded to 500 stores across the United States. However, a decision was made that would change the course of both companies’ futures.
McDonald’s chose to focus on hamburgers instead of burritos, leading to Chipotle being spun off. On October 5, 2006, McDonald’s shareholders received Chipotle shares in their accounts. Little did they know, those shares would go on to increase by over 2,700% in value.
Today, Chipotle has over 3,400 locations nationwide, and Steve Ells’ net worth has soared to $1.7 billion. It’s a clear example of how spinoffs can create incredible opportunities for investors who recognize their potential.
Wall Street’s Glitch
Spinoffs like Chipotle’s are often undervalued due to a Wall Street distribution glitch that puts institutional investors at a disadvantage. This glitch, however, works in favor of individual investors like you and me.
Being able to receive shares of a new company just by owning the original company’s stock by a certain date is a unique advantage. These pre-market stocks, as I like to call them, have shown consistent outperformance compared to industry peers and the S&P 500 over the years.
Studies from various universities have confirmed the positive impact of pre-market stocks on investment portfolios. The potential for growth and success with these shares is immense, making them a valuable addition to any investor’s strategy.
For more information on pre-market stocks and my top recommendations, click DeFi Daily News. Stay informed and stay ahead of the trends in the market.
So, the next time you hear about a company spinoff, remember the story of Chipotle and McDonald’s. It’s a tale of missed opportunities and unexpected success, showcasing the importance of recognizing potential when it presents itself.
As investors, it’s our job to stay informed, make strategic decisions, and seize the opportunities that come our way. By understanding the power of spinoffs and pre-market stocks, we can set ourselves up for financial growth and success in the long run.
Thank you for reading, and remember to keep an eye out for the next big opportunity that could change your financial future.
Regards,
Charles Mizrahi
Founder, Alpha Investor
