McDonald Shares crashed after its Quarter Pound Burgers were infected with e coli. Mcd Stock failing was natural as the e coli contamination spread to not one or two but nearly 10 states in the US.
McDonalds shares have crashed. The world famous fast food joint which represents the working American middle class was the epicenter of major e coli O157:H7 infections outbreak across 10 states in the US. The outbreak lead to the the death of 1 person, 10 people hospitalized, and nearly 50 people officially affected by the e coli contamination.
McDonald Shares Performance
Mcd Stock fell flat as much as 10% in after-hours trading dropping from their current price of $314 to the $280. The stock, however, later recovered to $296, a 5.8% hump.
This drastic crash is directly related to the e coli contamination that spread across 10 states in US. Consumers will avoid eating at this famous fast food joint because of health scare. The sales of McDonalds will go down because people will avoid this food chain because of health scare. This will reduce the quarterly profit of the company in coming months. This fear is what triggered the selling frenzy of Mcd Stock, bringing down the prices.
McDonald Shares Market Implications
Market trading experts are divided on the selling frenzy happening on Mcd Stocks. The question bothering them is whether it is an overreaction to the e coli infection widespread incident or a justified precaution against McDonalds loss in long term business.
On the other hand McDonalds competitors have greatly benefitted from the health scare of the fast food giant. Wendy’s and Shake Shack have witnessed increased sales in their outlets throughout the US where McDonalds contamination spread.
If past food crisis of other fast food joins are studied then market points out to Chipotle’s E Coli’s 2015 incident which severely impacted its sales and reputation for years. However, in the long run Chipotle shrugged off the setback and reached new highs in its stock prices.
McDonald Shares: E Coli Contamination Response
Centers for Disease Control and Prevention (CDC) confirmed the outbreak of e coli O157:H7 in 10 states across US. The outbreak originated due to silvered onions and Quarter Pound Beef Patties used at McDonalds.
The fast food joint has issued a statement about halting these materials usage at their outlets, and continuing other food options that are confirmed safe.
The regions Colorado, Nebraska, Kansas, Utah, and Wyoming have completely stopped the sales of the products responsible for e coli infections.
McDonald Shares: What will the Future Hold?
The E Coli Contamination poses a significant challenge to MCD Stock. It has not only affected the stock price but also raised questions on brand credibility and customer trust. McDonalds in swift response have already taken numerous actions to mitigate the e coli contamination damages.
The fast food giant has removed the contaminated materials from all over its outlets (silvered onions & Quarter Pound Beef Patty ). It has also also cooperated with Centers for Disease Control and Prevention (CDC), the U.S. Food and Drug Administration (FDA), and the U.S. Department of Agriculture (USDA) to trace the supply chain of these ingredients.
Furthermore, McDonalds implemented enhanced food security protocols including a review of freshly procured items used daily in its outlets. It has also actively informing it customers who might be susceptible to the e coli contamination, thus improving its consumer communication.
Lastly, McDonalds has temporary suspended the infected items from its menu particularly in Colorado and Nebraska where the damage was most extensive.
The slew of these measures has helped the mcd stocks regain its past stock price as evident below:
Also Read: e coli McDonalds: 1 Dead, 10 Hospitalized across 10 states