NEW YORK (TheStreet) -- Shares of Office Depot (ODP) - Get Report are down by 4.96% to $6.53 on heavy volume on Wednesday afternoon, as the judge overseeing the case between the U.S. government and office supply store Staples (SPLS) cast doubts on the company's arguments for acquiring Office Depot.

The Federal Trade Commission was in U.S. District Court for the District of Columbia looking to gain a preliminary injunction to stop the proposed $6.3 billion deal between the two companies, Reuters reports. If the FTC wins the injunction it will likely result in the termination of the deal as these mergers are hard to hold together during long periods of litigation.

Judge Emmet Sullivan expressed doubt over an argument by Staples' lawyer that the FTC was wrong in describing the office supply market as excluding ink and toner, referring to a case from 1962.

The judge referred to the lawyer's argument as "somewhat incorrect," Reuters added.

Staples' lawyer continued by arguing that the merger is necessarily to keep brick-and-mortar businesses going in an increasingly digital world, citing competition from Amazon.com (AMZN).

"This merger has always been about keeping these 1980s companies relevant" in a digital world," Staple's lawyer said, Reuters added. "They're (Amazon) like a boulder rolling down a hill."

Separately, TheStreet Ratings has set a "hold" rating and a score of C- on Office Depot stock. The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: ODP

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