Office Depot's Stock Just Jumped -- But You Won't Like the Reason Why
It's not every day you see a stock's share price jump more than 800%, but in a market that has seen a surge in day-trading activity, it might seem like anything's possible. Unfortunately, the news that's sending Office Depot's (NASDAQ: ODP) stock price into the stratosphere isn't cause for celebration.
Office Depot has been under pressure for years, as the office products retailer's stock has lost two-thirds of its value since 2015. Competition from online retail has made Office Depot's brick-and-mortar store look costly by comparison, and business has fallen off steadily. Revenue growth has disappeared, and profits have waned. And now, the latest move from the retailer simply indicates Office Depot's recognition that it's unlikely to make a huge amount of progress in making a full recovery.
Office Depot announced last week that it would move forward with a reverse stock split of its shares. The move had been telegraphed for a while, with shareholders having approved a reverse split during Office Depot's annual shareholder meeting in May. At the meeting, though, investors didn't know exactly what the terms of the reverse split would be.
Source Fool.com
