9 The Reckoning
On September 6, Chipotle’s leadership team learned that investor William Ackman had amassed a 9.9% stake in the company through his hedge fund, Pershing Square. In an SEC filing disclosing the position, Pershing called Chipotle “undervalued,” with a “strong brand, differentiated offering, enormous growth opportunity, and visionary leadership.” It also stated its intention to “engage in discussions with [Chipotle’s] management and board of directors” about everything from the composition of the board to the company’s cost structure and strategic plans. Chipotle’s share price jumped nearly 6% on the news.
Ackman is one of Wall Street’s most high-profile activist investors. Known for his controversial bets and caustic approach, he’s not like “those individuals” in Chipotle’s annual shareholder meeting, as Moran described them, who “read proposals and air a protest or two.” In the past, Ackman has taken substantial positions in fast-food chains, including McDonald’s and Wendy’s, and then agitated for them to adopt major transformations
