Ackman Builds on His 2019 Rebound as Chipotle Rallies to Record

(Bloomberg) -- Bill Ackman has made about $730 million betting on burritos.

The of the billionaire investor’s stake in Chipotle Mexican Grill Inc. has surged as the restaurant chain rose to a record Monday, more than three years after a food-safety crisis tarnished the brand and battered its shares.

Ackman originally invested roughly $1.2 billion in the company back in 2016. Two years later, with the shares up 17%, he started selling, offloading batches of shares in a series of transactions between August 2018 and last month. Now, with Chipotle grazing a new high, the of Ackman’s remaining stock in the company has surged to about $1.35 billion.

Ackman’s Pershing Square Capital Management has returned about 48% on its investments this year through July 9, according to the firm’s website. The strong returns are a welcome reversal of fortune for Ackman, whose high-profile setbacks in recent years have included his $4 billion loss on Valeant Pharmaceuticals International Inc. and his losing bet against Herbalife Nutrition Ltd.

Chipotle’s shares gained 1.2% to $759.87 in New York, the highest since the company’s initial public offering in 2006. The customer-illness issues started in 2015, and the shares closed that year at $479.85, beginning the first of three straight annual declines.

Ackman’s Pershing Square Capital Management declined to comment on the investment.

Activist Ackman announced a stake in the company in September 2016, wagering that Chipotle could rebound. The company later that year added four new board members in a shake-up endorsed by Ackman, then replaced Chief Executive Officer Steve Ells, who founded the chain, with former Taco Bell chief Brian Niccol.

Under Niccol, the burrito chain has made a series of overhauls. It has relocated company headquarters, pushed hard into delivery and rolled out a new loyalty program to attract customers. So far results have been positive with the key indicator of same-store sales rising 9.9% in the latest quarter -- the fifth consecutive period of acceleration.

The shares were up 0.9% at 3:49 p.m. in New York, paring some of the earlier gains. The shares finished 2018 up 49% and have surged about 75% so far this year.

©2019 Bloomberg L.P.