We thought we’d never see the day that people would run away from Chipotle. But it has come.
Stock for the fast-food eatery known for its giant burritos is down more than 6 percent after famed hedge fund manager David Einhorn recommended shorting the stock at a conference Tuesday, according to the Financial Times’ Alphaville. Einhorn, who famously shorted Lehman Brothers before its collapse, said Chipotle faces a threat from rival Taco Bell, which is now featuring more upscale offerings on its “Cantina Bell” menu, MarketWatch reports.
Einhorn’s negative take drew ire from Chipotle fans all over Twitter, many of whom doubted that the chain could be beat by what they described as a lesser rival. Some gems picked up by MarketWatch include Yahoo Finance personality Jeff Macke's “CMG has plenty of problems, Taco Hell competition isn’t one of them” and Top Gun Financial Planning's “Clearly Einhorn can read financial statements but does he have taste buds?”
Einhorn’s comments are just the latest in a series of financial woes for Chipotle. The company posted its slowest sales since early 2010 in July on slower consumer spending. In addition, higher prices for commodities like corn and meat may be cause for future concern for the company.
This isn’t the first time the gospel of Einhorn, the founder of Greenlight Capital, has had a dramatic effect on a company’s stock. When he said that he was shorting Green Mountain Coffee last year, the firm’s stock price plunged, according to the FT. The mere mention of General Motors uttered from Einhorn’s lips at the conference Tuesday gave the automaker’s stock price a boost, according to Forbes.
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