Summary
Rite Aid fell immediately after the merger deal with Albertsons was called off.
Uncertainties are hurting share price.
Management needs to communicate a turnaround plan to investors.
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Any analyst may write up an opinion on the fair value of Rite Aid (RAD) but the stock’s worth, at present, is only what the market is willing to pay for it. Last week, sellers willingly gave up the stock for as little as $1.27 before shares closed at $1.46 on the week. Why did RAD stock fall by so much and will shares ever recover? Longtime investors who bought the stock at the $5 range and averaged down need to decide what to do next.
default credit watch on August 9 in light of the merger deal getting scrapped. This downgrade is both late and meaningless: If Rite Aid merged with Albertsons, the company would have been even worse off. Declining cash flow would have made the oversized firm unable to pay its debt obligations, accelerating its chances of a bankruptcy.
