Chipotle Case

INTRODUCTION

The history of the stock market can be traced back to nearly 200 years ago. In 1972, a group of merchants formed together to form the New York Stock Exchange. The creation of the stock market gave anyone the opportunity to invest in a public company, and in doing so; one can take part in the success of the company for their personal gain. However, there is a more circumspective social benefit to investing as well. Investing in a company helps it grow and stay successful. The more successful the company, the more stores they have, which lead to more profit and the company paying more taxes. It also benefits employment because the company will have to hire more employees. All of these benefits stimulate the American economy and play a huge part in our dominance on the global level.1

As a student majoring in finance, I personally think every American home should have companies that they invest in, not only for the personal benefit, but for the potential benefits on our economy as well. Though in theory it seems like an easy thing to do, it is not. It would not be wise to blindly invest ones hard earned money into a company. Investing in a company stock is very complicated and complex to understand, which is why most people do not bother to exercise the opportunity. Tom Lieser, the Vice President of The United Bank of Switzerland, says the most basic standard of a good investment is to know three main things about the company: First, what it is. One should know if the company they are investing in is one you can support. Their morals, standards, and beliefs, that extends beyond the business aspect of just making money. Do they value their product? Care about their customers? Employees? Secondly, does the company have potential for growth in its industry? And lastly, the investor should know the details of its past, current, and future stance in the market from which it can make the final decision to invest. This includes the growth of the company, revenue increases, and the up and downside scenarios that the company may have.2 Chipotle Mexican Grill is a company worth investing in because it satisfies all three basic standards of a good investment. Chipotle provides all the necessary information to know what exactly you’re investing in, they have promising potential of expansion and growth in their industry, and most importantly, the details of the financial aspects of the company show great worth.

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WHAT IS CHIPOTLE?

Chipotle Mexican Grill is a restaurant that is categorized as fast casual dining, and as their name suggest, they serve Mexican Cuisine. When making an investment in a restaurant the investor must know about the food on the menu, the health facts, and their business practices. The gathering of all this information will satisfy the first standard of a good investment. The investor will have knowledge of what the company is and what it does in its industry. This is the crucial first step in making an investment. In a sense, it’s the “getting to know you stage” in the relationship between the investor and the company.