Friday, October 17, 2008

Update on Rite-Aid

It looks like Rite-Aid is going to do a reverse stock split to avoid being de-listed from the big board. Recent stock prices have been in the 75-80 cent range and they have to get up at least over a buck.

The company has not yet selected a ratio for the reverse split. Rite Aid will hold a special meeting of stockholders in December to vote on the reverse stock split.

Rite Aid received notice from the NYSE yesterday that its shares had fallen below the $1 limit for more than 30 days, meaning that the stock was no longer in compliance with listing standards. To regain compliance, its shares have to be worth more than $1 apiece for 30 consecutive days, by the end of a six-month period.

Update on the update: Rite-Aid announces that the reverse split will be between 10x and 20x:

Once stockholders approve the split, Rite Aid's Board will select a reverse stock split ratio of either 1-for-10, 1-for-15 or 1-for-20 so that, depending on the ratio chosen, either10, 15 or 20 shares of issued and outstanding common stock will convert into one share of common stock. The price of each common share would increase by the same ratio so that a stockholder would have fewer but higher priced shares, keeping the total investment the same when the market opens on the date a split becomes effective.

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