On Monday, Chipotle Mexican Grill (CMG) - Get Report renewed its annual Halloween promotion: Come into any location dressed in costume and you can purchase an entrée for only $3. But the beleaguered burrito chain itself is receiving more tricks than treats.

On Monday, the company's stock plunged by nearly 2.5% as investors continued to show the same aversion to the stock as they have since several hundred people got sick from food-borne bacteria at different locations last year.

Chipotle optimists have good reason to be scared. Last week, several major media outlets reported that the troubled fast-casual chain is spending a lot of money to defend itself against activist investor William Ackman.

In September, Ackman, through his hedge fund, Pershing Square Capital Management, purchased 2.9 million shares of Chipotle, or about $1.2 billion worth. That 9.9% stake makes Pershing Square the company's second-largest shareholder, after Fidelity Investments.

Ackman's purchase isn't usually a signal that he feels good about where A company is headed. It generally means the opposite. Rather than waiting for his shares to appreciate, Ackman is an activist investor famous -- or infamous -- for pushing for drastic change in the companies he buys. A lot of times, that means either forcing out board members or selling off chunks of businesses.

Over the years, Ackman's portfolio has returned nearly 2,000%. But the past year has seen some notable stumbles, including bad calls over the last two years on Valeant Pharmaceuticals and Herbalife. As of Oct. 11, Pershing Square was down 21.4% for the year, a performance worse than 2015's "worst ever" loss of 20.5%. The hedge fund's assets under management have declined over the past 18 months from more than $20 billion to about $11.5 billion.

In September, Chipotle stated that it appreciated Ackman's "confidence" in the company. However, since then, the hedge fund and the restaurant chain have reportedly held two meetings and several telephone conversations, according to the two unnamed sources.

And that was apparently enough to upset the company. Chipotle is now turning to high-profile investment banks Goldman Sachs and Morgan Stanley, as well as law firm Wachtell, Lipton, Rosen & Katz and public relations firm Joele Frank Wilkinson Brimmer Katcher to protect its business from Ackman and Pershing Square.

Clearly, the Ackerman-Chipotle relationship is turning into a fiasco. Last week, Chipotle posted yet another dreadful quarterly earnings result, as well as announcing that it as plans to add to its menu, launch a new TV advertising campaign and cast off its Shop House Kitchen offshoot, which brought the Chipotle fast-casual formula to Asian cuisine.

Chipotle may have made some improvements after last year's food-borne illness scare, but it's still a poisonous stock that investors should avoid.

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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.