Rite Aid stock could get delisted from NYSE
Drugstore chain Rite Aid Corp. — which has been in a state of transition over the last two years — is now at risk of having its stock delisted from the New York Stock Exchange.
The stock exchange notified the Cumberland County-based company on Thursday that its share price was not in compliance with the exchange's rules. The exchange requires the average closing price of a listed company's common stock to be at least $1 per share over a consecutive 30-day trading period.
Rite Aid shares opened the day Friday around 76 cents per share. The price has been under $1 for much of the last month.
The NYSE gave Rite Aid six months from the notice to get its stock price above $1 for a month to regain compliance.
Rite Aid, in turn, said Friday that a reverse stock split could be an option to "cure the share price non-compliance." Under a reverse stock split, the company’s outstanding shares are consolidated or merged at a predetermined ratio to limit the number of shares and theoretically make them more valuable.
If necessary to regain compliance, the company said the reverse stock split could come up for shareholder approval no later than at its next annual meeting. The last shareholders meeting was in late October.
At the last meeting, shareholders approved a plan to reorganize the company's board. The board changes, which followed two failed merger attempts, included shuffling three of the nine board seats and dividing the roles of chairman and CEO.
In August, Rite Aid and supermarket chain Albertsons called off a planned merger. The Albertsons deal followed the sale of Rite Aid stores to Walgreens following a failed attempt by Walgreens to buy Rite Aid outright.
Instead, Rite Aid made $4.4 billion after selling 1,932 stores and three distribution centers to Walgreens, shrinking Rite Aid’s store count.
Rite Aid officials had been pursuing the Albertsons deal as a way to diversify the company's revenue and profit streams. But shareholders didn't like the deal and there was opposition from leading advisory firms.