Chipotle Mexican Grill (CMG) shares are down 2.05% to $58.68 as of 1:41 pm on Friday, following the announcement of a class action lawsuit filed against the company. The lawsuit, filed by Rosen Law Firm and other legal entities, alleges that Chipotle made false and misleading statements regarding its portion sizes, which were inconsistent and left customers dissatisfied. The legal action claims that Chipotle's efforts to address these issues by ensuring more generous portion sizes have led to increased costs of sales, impacting the company's financial outlook. This legal development has likely contributed to the downward pressure on Chipotle's stock price.
Additionally, insider selling activity may be influencing investor sentiment. A recent SEC filing revealed that Christopher Brandt, Chipotle's Chief Brand Officer, sold 20,000 shares of the company, amounting to $1.2 million. While insider sales can occur for various reasons, they often raise concerns among investors about the company's future prospects.