Last Tuesday October 14, Walmart’s stock price dropped by 10.04% due to their dim outlook on next year’s predicted profits. This drop was, reportedly, one of the biggest single-day declines in Walmarts history leaving the closing adjusted stock price at $60.03; the lowest its been since May 23, 2012. However, last Tuesday’s drop was one of only eight times in history in which the daily stock price change was greater than -10% with the last occurance happening on January 8,1988.
To compare the magnitude of historical daily price changes I pulled data dating back to 1972. I focused only on the adjusted closing prices to normalize the historical stock prices and account for stock splits that have occurred. The average daily price change has been 0.08% with a > 99% probability of being between -5.7% and 5.9%. Historically, the daily change has decreased greater than the > 99% probability threshhold (-5.7%) 68 times. Prior to Tuesday, the last time this occurred was January 8, 2009.
However, including Tuesday’s -10.04% decrease, Walmart’s stock price has only decreased by -10%+ eight times in its history. Prior to Tuesday the last time was January 8, 1988 when Sam Walton announced he was stepping down as CEO resulting in a -10.27% decrease. On October 16, 1987 Walmart’s price dropped -11.79% as part of the “selling avalanche” that occurred the few business days prior to Black Monday. The remaining five indidents occurred between 1973-1974 likely due to the ‘73-74 bear market crisis.