Suzanne DeChillo/The New York Times

The share price of Chipotle Mexican Grill is dropping like a lead burrito after the hedge fund manager David Einhorn called the fast-food chain overvalued.

Chipotle is the latest “short” idea from Mr. Einhorn.

On Tuesday, Mr. Einhorn outlined the bearish case for the company, arguing that Chipotle’s business was vulnerable to competition. His statements sent the stock tumbling nearly 6.5 percent

Mr. Einhorn, the president of Greenlight Capital, noted that Taco Bell’s new upscale menu, Cantina Bell, would lure customers away from Chipotle, which offers higher-priced options. Size matters, too. Taco Bell has 5,600 retail locations, but Chipotle has 1,200 restaurants.

“Taco Bell has started to eat Chipotle’s lunch,” Mr. Einhorn said at the Value Investing Congress, an industry conference in Midtown Manhattan.

Einhorn has built a cult following on Wall Street for his shorts, which take aim at companies with vulnerable share prices. He infamously took Lehman Brothers to task months before the firm went belly up. He also called out Allied Capital for questionable accounting and valuations. More recently, he took aim at Green Mountain Coffee Roasters.