NEW YORK, NY / ACCESSWIRE / October 5, 2017 / Shares of e-commerce site Shopify sank on Wednesday after short-seller Citron Research released a video note calling the company a "get-rich-quick" scheme. Shares of Office Depot also sank despite announcing big news on Tuesday that the company would be purchasing Compucom for $1 billion; an information technology services company.
RDI Initiates Coverage on:
Office Depot, Inc.
Shopify Inc.'s shares closed down 11.57% on Wednesday with nearly 21 million shares traded compared to an average volume of just around 1.6 million. Shares of the stock fell after a short-seller had some less than kind things to say about the company. Short-seller Citron Research released a report that described Shopify as a "get-rich-quick" scheme. Citron's founder Andrew Left compared Shopify to Herbalife. The firm said it was "the best build-your-own e-commerce software on the market." According to Left, Shopify violated 'Every FTC Rule.' In a video post, the firm set a price target of $60, roughly half its opening price yesterday.
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Office Depot, Inc.'s shares closed down 17.65% on Wednesday with nearly 25 million shares traded. Despite the loss, the company had some big news and announced on Tuesday that it would be purchasing information-technology services company Compucom for $1 billion. The company entered into an agreement to buy the Texas-based IT services provider from Thomas H. Lee Partners in a transaction for $750 million in new debt and 45 million shares of common stock. The deal will allow Office Depot to step out of the office supply realm and become a broader business services and technology company. CEO Gerry Smith commented, "The combination of CompuCom's enterprise IT services with our millions of customers and approximately 1,400 distribution points gives us the credibility and scale to build a sustainable platform and stand apart from the competition."
"The company will create value for shareholders from a diversified revenue base with a clear opportunity to grow higher value services and business-to-business revenues."
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