Chipotle Shares Fall On New Health Scare

Chipotle Mexican Grill Inc. (NYSE:CMG) saw its shares take a dive Thursday after concerns about food safety at the burrito chain were revived. Shares of Chipotle were down 2 percent at $393.21 per share midday Thursday after falling as much as 3.7 percent to a session low of $386.21 earlier in morning. Prior to last year’s highly publicized food safety issues, the company’s stock traded above $750. The reaction shows just how sensitive Chipotle currently is to food safety concerns.

The new concerns came as best-selling author Eric Van Lustbader tweeted that his editor became ill after eating at one of its restaurants in Manhattan. Van Lustbader, author of “Jason Bourne” novels among others, tweeted: “This Chipotle thing is still ongoing. My editor ended up in urgent care after being deathly ill all night from eating at Chipotle’s.” Van Lustbader said that his editor spent seven hours in the emergency room, with doctors surmising that the illness could be traced to unsanitary food handling.

Dozens of comments from Chipotle customers and traders followed. Some sought more information while others criticized him for publicizing the illness without a confirmed diagnosis. Some Twitter users accused Van Lustbader of attempting to disparage Chipotle and purposefully influence the market. Van Lustbader responded that he did not know more than his editor told him and had no interest in the company’s stock price. Shortly after, another Twitter user replied to the tweet to report a similar incident.

Last year, health officials linked E. coli, Salmonella and Norovirus outbreaks to its restaurants in several states. According to the U.S. Food and Drug Administration, symptoms from botulism, Listeriosis, Salmonellosis, Norovirus and Staphylococcal food poisoning can appear within hours after exposure. Symptoms of E. coli and some other illnesses typically arise 24 hours to several days later. Chipotle spokesman Chris Arnold said the chain had received no current reports of illness from customers or health departments in New York City.

Regulators gave Chipotle an all clear in February of this year, but the chain has struggled to convince customers to return. Chipotle has spent a considerable amount of time and money implementing new safety measures to make sure the chain never faces a similar crisis again. Chipotle has also spent $70 million on promotions, hoping the draw of free burritos would help its turnaround. Unfortunately, the tweet landed the same week that chain’s executive in charge of food giveaways and other sales-boosting promotions was charged with cocaine possession and took a leave of absence.

 

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