Rite Aid Corporation (NYSE: RAD) may have just made the last or one of the last announcements that saved the reputation as far as it being a stock that investors would stay interested in. The drug store chain announced that it has received notice from the New York Stock Exchange that Rite Aid is now back in compliance with the exchange’s share price listing requirement now that its closing share price on June 30, 2009 and its average closing share price for the prior 30-days of trading were both above $1.00. This will keep the company from pursuing that awful proposed reverse stock split. These are not the only positive things happening for the company and for the stock.
The announcement today comes on the heels of a major debt refinancing pact reached this week. It had already noted that it completed $1.9 billion refinancing of its September 2010 debt maturities. That included its $145 million Tranche 1 Term Loan and $1.75 billion senior secured revolving credit facility. The new pacts extend maturities to 2012 to 2016.
And just over a week ago, the company showed no new nasty surprises when it reported a loss for the quarter as same store sales actually grew.
In late 2008, we noted that CEO Mary Sammons might decide to lighten up on her dual roles as Chairman and as CEO. It now looks like the decision of what to do will be more in her hands now rather than in the hands of others.
Making a huge cheer when a stock has had a miserable decade and shares trade at $1.55 is probably a bit premature. It might even be the same as letting your family make any single gift selection they want, so long as it is purchased at the Dollar Store. But all that aside, the developments at least seem as though they are heading back in the right direction.
After a 2.7% gain to $1.55, its 52-week trading range is $0.20 to $1.97. Right before the end of 2007 this was a $4.00 stock, and it traded north of $6.00 throughout much of 2007.
This is still a turnaround that has not fully turned around. But the notion of its survival is no longer a question that has the words “critical” and “imminent,” and we aren’t considering asking about the chances that those various “Chapters” that get referred to in the legal codes.
Jon C. Ogg
July 1, 2009
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