Chipotle stock sank 12% after a CDC post about E-Coli. The outbreak affected 45 people, 43 of them said the ate at a Chipotle the week before their illness started. http://www.cnbc.com/2015/11/20/chipotle-stock-drops-after-e-coli-outbreak-widens.html Since it's doubtful the stocks will stay that low for long, investors could profit from this or would it be too risky to buy Chipotle stock now?
I think they did a good job of damage limitation and this was expected. As there have been so many recent outbreaks and recalls of products, companies usually bounce back once people have forgotten about it. In this case it seem to be concentrated to an area where the supplier of the produce may have been at fault rather than the establishment. Still, bad PR takes a while to recover from, but it's not impossible.
If you like the company then this would be a great time to jump in. The effect on earnings from this will be minimal, people will remember this and thus not eat at Chipotle for a week or two and then things will be back to normal.
That isn't surprising considering all the bad press they got after the e coli scare. i feel bad for them though because they seem like they wanted to do the right thing for their consumers by serving all natural foods. I guess they are going to have to consider the source a little more carefully when they are importing their vegetables.
They were flying ridiculously high for a long time. Not shocked to see them finally come down to earth a bit, although it sucks to have happened this way. In the grand scheme of things, this won't likely matter months and years down the road. But I just look at what a little bacteria did to a company like Blue Bell - who granted is a smaller, private company, of course. I just wonder how much lower it will fall? http://www.marketwatch.com/story/ch...4-after-fresh-ecoli-cases-reported-2015-11-20
I second crimsonghost747. Things like this happen but as long as PR and damage control is on point it will bounce back. I made a nice profit on Maple Leaf Foods here in Canada after a similar incident a few years ago.
I don't think that the effect on the earnings will be minimal, honestly. I wouldn't buy anything from Chipotle these days, not until there is a public statement where they clarify this problem. However, if you're willing to trade them, yes, it may be a good opportunity, because a lot of people will try to do the same thing, thinking it's a good opportunity to buy. I expect the shares to go up in the following days. But if I were you, I wouldn't keep the stocks too much, especially not until the earnings.
I guess time will tell. But in general people forget these things really fast and thus will go back to eating in Chipotle in no time.
