What happened

Shares of medical supplies distributor Henry Schein (HSIC 1.27%) are down 26.5% as of 11:35 a.m. EST -- or are they only really down about 6%? The answer depends on how you look at it.

So what

Technically, since Henry Schein shares closed at $79.69 yesterday, but cost only $58.55 today, well, that's a 26.5% drop. But here's the thing: On Jan. 8, Henry Schein confirmed plans announced earlier to spin off its Henry Schein Animal Health Business, which would then immediately be acquired by and merged into privately held Direct Vet Marketing, which would then change its name to Covetrus and be listed on the Nasdaq under the ticker "CVET."

This morning, Henry Schein further confirmed that this spinoff has taken place. Thus, the new share price of Henry Schein stock reflects the fact that a substantial slice of the company's business has been excised and moved somewhere else.

Check out the latest Henry Schein earnings call transcript.

Kitten and puppy holding a stethoscope

Don't panic. Henry Schein shares are healthier than they look today. Image source: Getty Images.

Now what

Henry Schein says it received $1.1 billion in "tax-free proceeds" from the spinoff and remerger of its animal health business, funds that will be used to pay off about half of the company's $2.2 billion debt load.

Post-spinoff, Henry Schein says it still has about $6.1 billion in annual revenue, of which 68% comes from the sale of dental supplies, 28% from medical, and 4% from the sale of technology and services. Both the company's medical supplies business and its services business were profitable before the spinoff, and will probably remain so post.

We'll just have to wait for the next earnings release to find out how profitable Henry Schein will be after its reorganization.