Ever since Rite Aid (RAD) management withdrew its proposal to merge with Albertsons, the stock failed to return to the $2 range and fell steadily. At a recent close of $1.11, the stock is in danger of falling below $1.00. The NYSE will then warn Rite Aid that the stock faces a delisting if it closes at sub-$1 for 30 days. Investors have two questions that need answering. First, when is the shareholder vote that will let investors pick alternative management and board members? Second, why is RAD stock falling and what will it take for it to recover?

According to one of my readers, Rite Aid sent a proxy and voting instructions on a Saturday at 3 a.m. The company did not post any press release to inform investors of the upcoming shareholder voting. By keeping the proxy event low key, chances are good that the existing CEO and board will be re-nominated. This is not a good outcome for shareholders because management failed to maximize shareholder value. In the last few quarters, the company spent all of its efforts trying to merge with Albertsons. It has no “Plan B” that addresses the company missing quarterly earnings and revenue by a wide margin.

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