Following a judge's decision that the two companies may not merge, Office Depot — which was downgraded by Jefferies from "buy" to "hold," and from "neutral" to "sell" at UBS early Wednesday — fell about 40 percent to below $4 a share. Staples stock, which was downgraded by both Jefferies and UBS from "buy" to "hold" status, tumbled more than 18 percent to below $9 a share.
"Without the benefit of synergies, both Staples and Office Depot have less appealing profit outlooks," Jefferies analyst Daniel Binder told investors. "They will continue to face secular declines, and each company's business is vulnerable to competition from online and nonoffice supply retailers."
SPLS (green) and ODP (blue) in 2016