Why The ODP Corporation Stock Fell as Much as 10% on Aug. 5
Shares of office supply and service provider The ODP Corporation (NASDAQ: ODP), formerly known as Office Depot, fell as much as 10% on Aug. 5. Although it managed to work back from that loss, by 2 p.m. EDT, the stock was still down roughly 7%. The big news behind the move was the company's second-quarter earnings release.
Before getting into second-quarter earnings, there's a little background to cover. On July 1, Office Depot reorganized as The ODP Corporation. Although it was more than a simple name change (it involved creating a holding company to better organize the ODP's various businesses), the real impact on investors is minimal. At the same time, however, the company announced that it had completed a 1 for 10 reverse stock split.
Now the stock is trading in the high-teens as the split doesn't actually change anything at the company. However, it did pull the stock up from the low-single-digit dollar area that investors tend to avoid when looking at stocks to buy. That said, stocks often trade lower after material reverse splits like this one.
Source Fool.com
