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Dean Foods takes a hit on WhiteWave spin-off

October 26, 2012: 12:43 PM ET

Investors were lactose intolerant Friday.

Dairy giant Dean Foods officially spun off one of its most profitable subsidiaries through an initial public offering late Thursday.

Shares of WhiteWave (WWAV), which makes Horizon Organic and Silk soymilk, among other things, opened sharply higher, but fell back later in the day to trade near the IPO price of $17 a share.

Meanwhile, Dean Foods (DF) shares plunged 13% after the stock was downgraded by analysts at Stifel Nicolaus.

StockTwits traders had plenty to say.

Stockbasketball: If you own shares of $DF you own shares of $WWAV via the forthcoming spinoff. This sell off of $DF is just plain crazy

Here's where it gets interesting.

Dean Foods retains an 88% stake in WhiteWave, according to the company's prospectus. So the sell-off in shares of Dean Foods was somewhat perplexing.

JFinDallas: @ipoguy I am really surprised this $WWAV deal is being dumped so hard, I was convinced it was going to do well, not a good sign for the mkt

Dosberg: It's Chutes and Ladders for $DF today.

Blink: $DF Stifel d/g to Hold from Buy this is up over 7 pts into $WWAV IPO today, usually the parent gets smacked hard after IPO

Stockbasketball: Stifel Nicolaus downgrades $DF to hold as they are valuing the stock w/out $WWAV. That is genius cuz $DF still owns 88% of WWAV. Lol!

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Ben Rooney
Ben Rooney
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Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

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