Chipotle Shares Sink On Norovirus Claims

chipotle-shares-sink-on-norovirus-claims

Shares of Chipotle Mexican Grill hit a new low on Thursday after customers from a Virginia Chipotle branch tested positive for norovirus, a contagious virus that causes gastroenteritis to those affected. This comes after the company admitted on Tuesday that a number of its customers from a Chipotle branch near Washington were affected by the norovirus sending the company’s market value down by about $516 million.

The said branch was then closed following multiple reports of around twelve people who fell ill after visiting the said Chipotle outlet. Reports also showed that the customers underwent hours of vomiting, diarrhea and other related symptoms for hours due to the virus. According to Chipotle, the outbreak in the said branch has been caused by either an affected customer or employee.

The issue comes a year after the company suffered huge losses last 2015 due to the widely broadcasted e.coli outbreak. Chipotle has since been working on mending the blow it suffered throughout the duration of 2016 coming up with ways to compensate and to raise its sales.

However, Chipotle was not able to avoid other issues after it was repeatedly bombarded with countless claims of unfair employee treatment and salary cheating accusations that sent the company’s shares and same store sales down during the greater part of the year.

The company missed earnings estimates by almost 40% during the last couple quarters of the year. Chipotle’s stock has also lost around 44% during the past two years but started this year on a positive note following a number of analyst rating upgrade due to the prospect of a management shift within the management.

On Thursday, Chipotle shares slumped to a four-year low after reports confirmed that its branches and its affected customers tested positive for norovirus. During the same day, video footage showing three rodents seen at a Dallas Chipotle branch surfaced. According to the management, the mice seen were only able to get inside the establishment due to a small structural gap in the building. Others also claimed that a number of rodents were seen to have fallen from the ceiling of the restaurant.

The video footage which went viral sent Chipotle shares down by 4.5% during the day to $365.05. The decline in the shares of the company then totaled to 10% since Monday summing up the losses in its market value by around $900 million.

Chipotle shares were known to have hovered above $700 prior to the massive e.coli outbreak around two years ago.

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