Retail
OfficeMax Destroyed On Lehman Exposure & Late Downgrade (OMX)
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OfficeMax Inc. (NYSE: OMX) somehow managed to not notice the major stock market rally. Its shares plunged 29% to $9.38 on 1.5-times an entire day’s average trading volume. Friedman Billings Ramsey downgraded the stock this morning to a "market perform" rating" from "outperform." Apparently, the brokerage firm realized that there is a slowdown in office spending for office supplies. It slashed its price target from $18.00 to $12.00.
Another and perhaps larger component of today’s drop is that yesterday the office supplies retailer disclosed that one of its units has securitization notes guaranteed by Lehman. No payment default has occurred. Here are the full details. The 52-week trading range on this stock was $10.89 to $34.89. Shares are being excessively. The Lehman exposure looks rather large, although this downgrade looks very late.
Jon C. Ogg
September 19, 2008
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