News broke yesterday that a guy named Bill Ackman had put $1.2 billion into Chipotle’s stock. He’s an activist investor, meaning that he’s going to use his new 10 percent share of the company to force change at the company.
That won’t be such an easy task, according to a new analysis by Bloomberg.
It’s worth a read, complete with lots of pretty charts, but we’ll give you a few key points of concern here.
First, Ackman has a mixed record. He did really well with a Canadian railroad company, but he failed to cause much of a turnaround at J.C. Penney, Bloomberg reports. Chipotle may be more like J.C. Penney, in that “fixing consumer companies is harder than it looks.”
The Bloomberg authors, Shelly Banjo and Tara Lachapelle, are not optimistic about Chipotle’s turnaround so far, saying management seems “out of touch.”
Plus, the chain is still opening new restaurants even as those new restaurants make less money, Bloomberg reports. Head over there for the rest.