Is Market Overlooking McDonald's Chipotle Stake? (MCD, CMG)

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Includes: CMG, MCD
by: GroovyStocks

In their IPO debut, shares of Chipotle Mexican Grill (NYSE:CMG) have more than doubled, trading at a recent price of $45 compared to an IPO price of $22. The Wall Street Journal reported:

McDonald's, which sold 1.8 million shares in the offering, now owns 88% of Chipotle's combined voting power and 69% of the economic interest in the stock. McDonald's has indicated that at some point it may spin off its remaining ownership in the burrito chain through an outright sale or through a tax-free distribution to its shareholders.

The interesting thing is that shares of McDonald’s (NYSE:MCD) have barely budged since yesterday—up nice cents at this writing. While there are multiple possible explanations for this, one could be that the market is overlooking the value of CMG inherent in MCD shares.

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