Investor Ackman feels like Mexican, buys 10 percent of Chipotle

Activist investor Bill Ackman has disclosed a almost 10 percent stake in Chipotle, and said that he wants to open discussions with the U.S. fast food chain’s management.

Pershing also said it meant to “engage in discussions” with Chipotle regarding the direction of the company, including board composition and governance.

Chipotle learned about Pershing’s move on Tuesday, according to company spokesman Chris Arnold.

But that was before an E. coli outbreak sickened Chipotle customers in 14 states and sent sales plunging for the last three quarters.

Ackman’s Pershing Square became a huge backer Valeant Pharmaceuticals, a drug company whose shares have plunged nearly 90 percent over the past year under multiple federal and state investigations.

Chipotle, meanwhile, is still struggling to recover from a series of foodborne illnesses that began in the second half of 2015. Tuesday’s filing revealed that Pershing had bought 2,882,463 shares as of August 24, or 9.9% of Chipotle. Adding to its woes, one of the company’s top four executives was recently indicted on charges that he bought cocaine from a NY drug ring.

Chipotle’s shares were up 5.3 percent at $435.07 in early trading on Wednesday.

Pershing Square has targeted companies ranging from JC Penney to Canadian Pacific Railway. The investment management firm now holds 81,000 shares of Chipotle Mexican Grill which is valued at $32,183,730, the company said in a statement filed on Aug 15, 2016 with the SEC.Chipotle Mexican Grill makes up approximately 3.07% of Ems Capital Lp’s portfolio. Six investment analysts have rated the stock with a sell rating, twenty have issued a hold rating and fifteen have given a buy rating to the company’s stock. The billionaire investor has assumed an increasingly activist bent over the past few years, most recently stirring a shake-up at consumer-products giant Procter & Gamble that ended in the ouster of its chairman and CEO.

And Ackman’s long and very public campaign against Herbalife, a company that he has called a pyramid scheme, has hammered investors in his hedge fund. Despite aggressive marketing tactics including burrito giveaways and free guacamole, the company’s second quarter comparable sales still fell 23.6%-its third quarter in a row of declines. Visit MarketWatch.com for more information on this news.

He may want to “slow down unit development and keep a more permanent focus on shareholder returns, with an eye toward a potential dividend”, Anderson said.