Friday, February 12, 2010

Macdonalds Nostalgia for Chipotle

Chipotle Mexican(CMG) put up some great numbers and shareholders bid the shares up. The shares are trading at the 52 week high. The shares are trading over $100 @ share. Stock split maybe? Now lets look through the rear view mirror and just think about what this success story could have meant for Macdonalds (MCD). The logic of yesterday was to sell off the asset and focus on so called core activities. Yes Macdonalds shareholders were supposedly compensated. But did all the financial engineering really create long term shareholder value? For Macdonalds. Or were financial engineering fees generated. The spin off meant Macdonalds shareholders were thought to be stupid and could not value growing cash flows and revenues.

Beware of the unlock value story. It did not work out in the best interests of Macdonalds shareholders.