One Man Cost Chipotle $7 Billion, Gives Starbucks $15 Billion, Just By Swapping CEO Chairs (UPDATED)

Editor’s Note: This article was updated to include Trian Fund Management’s recent stake in Starbucks and subsequent sale, as reported by CNBC.

As many Americans do, Brian Niccol decided to switch jobs. The former CEO of Chipotle Mexican Grill CMG took a new role, replacing Laxman Narasimhan as the CEO of Starbucks Inc SBUX on Tuesday.

Basically: While switching jobs may be relatively common, the reaction to Niccol's move was anything but. Chipotle's stock sold off in pre-market trading down by around 10%, knocking nearly $7 billion off in valuation from the burrito giant.

Read Also: Starbucks Analysts Mixed On New CEO Brian Niccol, Who Led CMG Stock 650% Higher In 6 Years: ‘Starbucks Is No Chipotle’

Starbucks shares soared, rising over 20% by Tuesday afternoon, boosting the company’s valuation by more than $15 billion. The executive shakeup for Starbucks comes after two activist investors, Elliott Management and Starboard Value, bought stakes in the company hoping to push for a turnaround.

Meanwhile, billionaire activist Nelson Peltz‘s Trian Fund Management recently acquired a “substantial” stake in Starbucks but sold it on Tuesday. CNBC reported that Trian had been in talks with Starbucks board chair Mellody Hobson before the sale.

Narasimhan had a relatively short stint at the helm of Starbucks, succeeding Howard Schultz as the Starbucks CEO in March 2023. Throughout the last year, Starbucks shares have underperformed the overall market as slowing sales in the U.S. and China have damaged its valuation.

Chipotle's stock has run into its own woes as of late, with shares now more than 25% off their highs set in June. Chipotle named COO Scott Boatwright as the interim CEO to replace Niccol.

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