Chipotle Mexican Grill (CMG) is set to undergo a 50-for-1 stock split after markets close on Tuesday. This means that shareholders will receive 49 additional shares for each share they previously owned. The fast-casual chain's split-adjusted trading will begin on Wednesday.

The decision to split the stock comes after Chipotle's shares have steadily climbed since the company went public in 2006. With an initial public offering (IPO) price of $22 per share, the stock has soared over 57% in the last year, reaching above the $2,000 mark in April 2023.

Amid a pullback in discretionary spending that has affected other fast food giants like McDonald's (MCD), Chipotle has managed to report strong earnings. Unlike its competitors, Chipotle and other fast casual chains such as Sweetgreen (SG) have been able to resist lowering prices.

The stock split, announced in March, aims to make Chipotle's shares more accessible to a wider range of investors, including its employees. By trading at a lower price, the company hopes to encourage employee ownership of the stock. To further promote this goal, Chipotle plans to offer a special one-time equity grant to general managers and employees with over 20 years of service.

After the split, the new shares will be distributed, resulting in 50 times more shares at a lower price per share, without altering the total value of investors' holdings or the company's market capitalization. For instance, if Chipotle shares were previously trading at $3,194.50, an investor holding one share would then possess 50 shares priced at $63.89 each after the split.

It's worth noting that Chipotle's stock split comes shortly after technology giant Nvidia (NVDA) performed its own stock split at a 10:1 ratio. Following the split, Nvidia briefly became the world's most valuable company by market cap. However, its shares declined in recent days.

Chipotle shares closed at a record high of $3,427.61 last Tuesday but slipped later in the week. As of Monday afternoon, they were 0.7% lower at $3,194.50. Nonetheless, the stock has gained nearly 40% since the start of the year, reflecting investor confidence in the company's growth prospects.

The 50-for-1 stock split will not only lower the cost of individual shares but also make Chipotle's stock more accessible to its employees and a wider range of investors. As trading begins under the split-adjusted conditions on Wednesday, stakeholders will be closely watching how this strategic move impacts the company's future performance.