How One Tweet May Have Caused Chipotle’s Stock To Sink

Image courtesy of Josh Bassett

Over the past several months, Chipotle has worked to rebuild its reputation, sales, and stock figures after enduring several high-profile outbreaks of E. coli and norovirus. All of those efforts may have been undone, however, with one simple Tweet alleging that the burrito chain may be responsible for sending a New York City customer to the hospital.

Author Eric Van Lustbader sent out a Tweet on Thursday claiming that his editor had fallen sick after eating at a Manhattan Chipotle over the weekend, noting that she had spent seven hours in the ER.

While Van Lustbader says he was only trying to look out for his friend and others in the city, his simple Tweet was apparently all it took for Chipotle’s stock to fall as much as 3.5% this morning.

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A look at the New York Stock Exchange shows that Chipotle’s stock dropped from a closing of 401 on Wednesday night to 389 on Thursday morning. The level has fluctuated for much of the day.

Chipotle tells Business Insider that the alleged illness has yet to be confirmed.

“We are aware of the post made on Twitter, however there have been no reports of illnesses at any of our New York restaurants,” Chipotle spokesperson Chris Arnold told Business Insider. “Moreover, we have excellent health department scores throughout the city, and we continue to have the highest standards of food safety in our restaurants.”

Still, replies to Van Lustbader’s original message included at least one other person who claimed they also became ill after eating at a Chipotle in the city.

Van Lustbader’s Tweet illustrates the precarious situation Chipotle continues to find itself in following outbreaks last year that sickened hundreds of customers.

The company, which has revamped its food handling policies, offered free burritos, and other promotions to lure back customers, has continued to see its stock dwindle from its before-outbreak levels.

In fact, the company’s shareholders sued Chipotle last month, accusing the fast casual restaurant of insider trading and providing misleading information about food-safety practices that would eventually contribute to multiple outbreaks.

The shareholder derivative suit alleges that the board and executives acted for their own good, and not that of Chipotle.

Among the allegations made were those involving shares of the company. The suit claims that co-CEO Marty Moran sold $107.7 million worth of company stock at the inflated price, based on inside information that the price would soon fall.

Additionally, it claims that the company’s founder and co-CEO, Steve Ells, sold shares worth $78.3 million in increments during calendar year 2015, ending in July. The first in a series of foodborne illness incidents that would continue into January 2016 happened in California in August of 2015.

[H/T Business Insider]

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