Chipotle Getting Hit Hard On Social Media After Restaurant Closure

Chipotle Mexican Grill, Inc. CMG and its investors can’t seem to get a break from negative headlines. The latest negative news for the struggling company is the closure of a restaurant in Massachusetts after one of its employees tested positive for a highly contagious norovirus.

While investors are hoping that the news will quickly blow over, data from TickerTags show that people are taking notice of the closure on social media. TickerTags monitors social media sites to identify trends by searching for words or phrases that appear together in social media content, such as tweets.

Since news of the most recent restaurant closure broke, Twitter mentions of Chipotle have doubled. Predictably, the sentiment of those tweets has also turned distinctly negative. Prior to the news, opinionated Chipotle tweets were roughly 60 percent positive, but they have since turned 65 percent negative.

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Although the stock is down 3.2 percent in the past five trading days, the larger story for Chipotle investors is the long-term impact that the norovirus scare and the 2015 E. coli outbreak will have on the perceptions of customers. In the past six months, Chipotle’s stock is down 29.5 percent.

The first step in re-building Chipotle’s reputation will be to stop the seemingly endless stream of negative headlines, a phase that can’t come quickly enough for shareholders.

Disclosure: The author holds no position in the stocks mentioned.