The new financing deal announced today is almost on-par with a straight offer of $5 a share for 20% of shares -- only, the deal was done with convertible bonds.
What this probably says is that the stock is undervalued here at $3.85 -- $5 should eventually become the new magnet for share-price.
It also does something else, and that is that it creates an atmosphere of confidence in ODP across the broader market. People see this kind of investment, and they know what kind of heavy analysis had to go into a decision like this -- it's actually much better than an analyst upgrade. Any fund manager who was thinking about a position in ODP just had his confidence boosted.
I think we'll begin a slow-drift back to $5 a share, probably hovering between $4.50 and $5.50 for a good long while -- months and months.
"We reported a net loss attributable to Office Depot, Inc. of $55 million for the first quarter of 2009 compared to net earnings attributable to Office Depot, Inc. of $69 million in the same quarter of the prior year"