Chipotle employees now have another incentive to keep them at the company, despite being hounded by TikTokers sacrificing basic social etiquette for the prospect of bigger portions. The company is rolling out a new program to give long-term workers equity—as well as a new stock split that makes shares cheaper to buy.

Chipotle’s stock is headed for a 50-for-1 split after the bell today, dividing a current $3,283 per share into fifty shares worth roughly $60. While stock splits don’t change the value of shareholders’ investments in the company, the cheaper price per share can make them more appealing to prospective investors.

The lower share price also makes it easier for the company to distribute equity to employees, the company has said. 46,000 Chipotle employees and about 40% of its total workforce are eligible to purchase discounted shares with up to 15% of their compensation. In addition, 4,000 restaurant managers and crew with more than 20 years of experience are getting a one-time equity grant.

Chipotle’s shares have gained 46.25% this year as it has continued to bring in strong sales despite falling consumer confidence due to persistent inflation. The bowlslop company has seen steady growth since its IPO in 2006, when shares were worth a mere $22.

Shares leapt after the company announced the stock split on March 19. While many fast-food chains like McDonald’s have suffered from a spending pullback among consumers, Chipotle’s higher-income customers have buoyed the company’s sales.

While stock splits are largely aesthetic for companies, they can result in an uptick in share price when investors swarm the suddenly cheaper stock. But this isn’t always the case. Nvidia executed a 10-for-1 stock split earlier this year, but that didn’t prevent the semiconductor company from taking a recent downturn.

Uno reverse

Chipotle is far from alone. 2024 has been a big year for the corporate tool: Splits are on track to reach their highest count in a decade this year if they continue at this pace.

While stock splits can drum up excitement among investors, companies can also reverse a stock split and consolidate shares to artificially inflate the price.

Shares of Nikola, the beleaguered electric vehicle maker, fell about 31% after the company announced a 1-for-30 reverse stock split last week. In other words, rather than divide one share into many, the company combined 30 shares into 1, reducing the number of shares available on the market and inflating the price of the remaining shares.

The company implemented the split after it was reportedly in danger of being delisted from the Nasdaq because shares were trading at such a low price.

While a stock split is more common than a reverse, a reverse stock split can be the canary in the coal mine for a failing company. For example, WeWork announced a 1-for-40 reverse stock split in September 2023.

So while more stock splits can be taken as a sign of market growth, don’t be fooled by a troubled firm suddenly seeing its share price exponentially grow.—LB

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Join the big league.

For additional disclosures, see ✢A Note From StartEngine below.

🟢 What’s up

• Nvidia rose 6.76% as investors realized they could buy shares of the world’s biggest semiconductor company at a discounted price.
• Trump Media & Technology Group rose another 8.50% today on the hopes of a cash infusion, as well as hype ahead of Thursday’s presidential debate.
• Carnival popped 8.85% after it beat analyst expectations for the second quarter, and raised its profit forecast for the rest of the year.
• Novo Nordisk rose 3.25% after its weight-loss drug Wegovy was approved in China.
• Enovix soared 35.05% on the news that it signed a major deal to provide VR headset batteries for an as-yet-unnamed California company.

What’s down

• Pool Corp., maker of…pools, fell 8.04% today after cutting guidance for the year ahead.
• SolarEdge Technologies dropped 20.60% through no fault of its own—instead, a key customer declared bankruptcy, and will be unable to pay the solar power company the $11.4 million it is owed.
• Airbus fell 9.41% after the company announced it is cutting financial guidance for the remainder of 2024 thanks to supply chain snarls and higher costs.
• Auto dealer stocks continue to suffer the effects of a massive cyberattack on CDK, a key supplier of dealership management software. The company says its systems will remain down until June 30, but in the meantime shares of Autonation fell 2.04%, Sonic Automotive dropped 2.56%, and Group 1 Automotive slid 2.49%.

Much ink has been spilled over tech stocks like Nvidia, Apple, and Microsoft. But there’s a reason investors have been hanging on to every word their executives utter—this small group of tech stocks have largely led the S&P 500 to record highs and turned the stock market around.

But after a selloff over the past few days, investors have seen how far many of the big tech names could drop—and how they can pull the rest of the market down with them.

Thankfully, Mark Newton, global head of technical strategy at Fundstrat, pointed out several investment opportunities beyond big tech that are chipping in to do their part lifting the overall market.

In a note to clients, Newton highlighted the financial, consumer discretionary, healthcare, and industrial sectors, which have all rebounded while tech sold off. They've helped to lift the equal-weighted S&P 500, while the market-weighted S&P 500, which gives more importance to big tech, is down over the past week. The rally outside tech “will become a bit more noticeable once the pullback in technology runs its course,” Newton wrote. Energy and communications stocks have risen as well.

He particularly pointed out biotech as one potentially overlooked opportunity for investors. The iShares Biotech ETF (IBB) reached its highest price since late February, closing above $139.81. Newton’s price target for the ETF is $148.

Nvidia and Apple are both down 4% over the past week, while Microsoft is flat. Tech has had one heck of a run, but it might be time to look beyond the sector.—LB

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• Wild elections may tempt you to make changes to your portfolio ahead of polls closing, but do so at your own peril.
• Cash is king, especially when you can earn a hefty yield these days just for keeping your money in a savings account. But remember: you'll miss out on some serious investment gains.
• Winning stocks will keep on winning, according to Morgan Stanley's Mike Wilson. But if bad economic news suddenly becomes bad news for markets, defensive stocks could outperform.
• The global supply chain is groaning under the weight of geopolitical conflict, threatening shortages and price hikes.
• Nvidia is a great company, but is it a great stock? Maybe not when it loses a Tesla's worth of market cap in just three days.
• Before the Fed cuts interest rates, it might be a good idea to buy these five stocks, including two REITs, two utilities companies, and a bank.

Tomorrow’s economic report du jour is new residential sales. A comprehensive look at the housing market provided by the Census Bureau, the new residential sales report highlights how many new single-family homes were sold and were for sale in a given month, as well as the median price of those homes. There were 634,000 new houses sold in April 2024, 7.7% lower than in April 2023, and economists are expecting 650,000 new single-family homes were sold in May.

Before the open

• General Mills may not be the sexiest stock in town, but it’s still an important part of a balanced breakfast portfolio. With consumers suffering under the yoke of high inflation, General Mills hasn’t impressed recently, and Wall Street doesn’t think it will change that narrative this quarter. But remember: You don’t invest in a 150-year-old company for growth, you invest in it for incredibly stable dividends. Consensus: $1.00 EPS, $4.86 billion in revenue.

After the close

• Micron Technology makes the non-semiconductor parts of a computer, which means it’s adjacent to the AI trade but close enough to ride Nvidia’s coattails higher. In fact, the last time Micron reported earnings, the stock popped 14% in a single day due to AI hype. Wall Street is looking for more of the same this quarter, with 18 of the 19 analysts covering the stock recommending it as a “buy.” Consensus: $0.46 EPS, $6.19 billion in revenue.

Yesterday we wondered aloud what companies you’d like to see go public, and as usual, the community didn’t disappoint with their answers.

Sports leagues were a popular answer, ranging from the NFL to the WNBA, FIFA, Formula 1, and more. Regional convenience stores and restaurants were another hot answer, with Wawa, Buc-ee’s, In-N-Out Burger, and Sheetz getting lots of shout outs.

Then there were the outliers. Rather than SpaceX or Starlink, several of you want to just go straight to the source and make NASA a publicly traded company. Huy Fong Foods, maker of Sriracha sauce, was a solid pick, while “the breakfast burrito market” doesn’t sound feasible (but does sound delicious).

Oh, and turning Nancy Pelosi’s portfolio into a publicly traded fund you could invest in has actually been done before.

And of course, a couple of you brown nosers want to see Morning Brew go public, which sounds great in theory, until we go hyperbolic like Nvidia and all our employee stock is worth millions and the whole company retires. But that sounds like a pretty good problem to have.

Want to submit some more answers, ask some questions that will be answered in a future mailbag session, or just say hey? Reply to this email or write to us at [email protected].