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Chipotle: Bill Ackman Wants To Taco Bout It

Summary

CMG finally has an activist investor.

But it’s not the one many were hoping for.

The hate for the activist involved might be creating an opportunity.

It looks like activist investor Bill Ackman is putting the proceeds from his Canadian Pacific (NYSE:CP) sale to work in a completely different space. Ackman's Pershing Square Capital now has a 9.9% stake in Chipotle (NYSE:CMG). Ackman is now its second largest shareholder.

The writing was on the wall as well, where Ackman has gone out of his way to mention his love of CMG. Recall that Ackman told a story about a meeting with Valeant (NYSE:VRX) and Mike Pearson, where instead of eating the catered VRX food, he had Mike's assistant fetch him a Chipotle burrito.

As we noted last month, CMG is a prime activist investor target, it was just a matter of time. However, much of the media and small research shops are taking Ackman to task, where it looks as if peak Bill Ackman is upon us. Much of the articles showing up on Seeking Alpha are negative. Ackman's run in with Valeant and his battle with Carl Icahn over Herbalife (NYSE:HLF) has created a lot negativity around the Pershing Square name.

As well, many investment houses are hitting the sell button after Ackman's announcement. This includes Stifel which reiterated its sell rating, calling Pershing's operational thesis...


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