Bill Ackman's hedge fund Pershing Square took a large stake in the fast food chain Chipotle. This makes Akcman the second largest shareholder of the company. After the news, shares of Chipotle rose 8%.
From Pershing Square report that the company is very undervalued and is a good place for investment, thus the 13D filing stated. A 13D filing is typically used when an investor takes an activist stance to demand changes. Ackman intends to enter discussions with Chipotle's management, related to the business operations of the company, structure, assets, and others, according to the filing.
Pershing Square has targeted companies ranging from JC Penney to Canadian Pacific Railway. He took an activist short position in Herbalife in 2012 — betting the shares would decline while alleging that the company operated like a pyramid scheme.
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