This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Einhorn's Call on Chipotle Among Week's Highlights

Stocks in this article: CMG WTSLA

NEW YORK ( TheStreet) -- The end of another week, one that has yet again been chock full of interesting developments. It never gets old -- easy to say when the markets aren't coming apart at the seams.

No sooner did I tout the remarkable run of the restaurant sector over the past several years, than a couple of curious things happened in the sector.

First, on Tuesday at the Value Investing Congress in New York, hedge fund manager David Einhorn presented his latest short case, this one for Chipotle (CMG). While I was not in the room this year to see Einhorn's presentation, I was for the past two years, in which Einhorn lambasted Florida land giant St. Joes (JOE) in 2010, and Green Mountain Coffee Roasters (GMCR) last year.

Einhorn's short presentations have become legendary, and the market reactions are typically quick and swift. St. Joe's fell 10% on the day of Einhorn's Oct. 13, 2010 presentation and 20% within two days. Green Mountain fell 15% on Oct. 18, 2011, the day Einhorn made his case, and is down more than 70% about one year later.

JOE Chart JOE data by YCharts

GMCR Chart GMCR data by YCharts

In Chipotle's case, shares were down 4% on Tuesday, following Einhorn's presentation, a fairly tepid reaction, so far, anyway. But Chipotle, which had been the one of the big growth stories of the past few years, had already lost about a third of its value between May and September.

After an incredible run up from about $50 in early 2009, shares topped out in the $440 range in May. As much of a fan of the restaurant sector that I've been, Chipotle was one name that seemed to be way too expensive.

I was way early in that presumption though; believing that Chipotle was overpriced at $230 in late 2010. The small short position I initiated at that time, and ultimately closed, was way too early. Now that David Einhorn has weighed in, it will interesting to see where Chipotle goes from here.

CMG Chart CMG data by YCharts

In other restaurant news, the Dave and Busters IPO, which was scheduled to begin trading Friday, was scrapped Thursday, due to "market conditions."

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs