Shares of Chipotle (NYSE: CMG) are falling hard this morning to be one of worst-performing stocks in the entire S&P 500. At this moment the stock is down 5.91% and the selling may get worse before the close as the shares were down roughly 8% an hour ago and seem to be trying to bounce. But if the bounce fails to continue today watch out.
The catalyst for the decline today is a story that was published last night by Business Insider of reports that 170 people reporting that they became ill after eating at a Chipotle location in Ohio.
The local health department found food cooking violations at this location before this story broke. Lettuce was not being cooled properly and the beans weren’t warm enough.
As for the stock, the drop in it isn’t that shocking, because Chipotle has had a big price rally in the past few months, much of which was likely fueled by short covering.