As Rite Aid Corp. (NYSE: RAD) prepares to report quarterly results on Thursday, short sellers are placing their bets that those results will encourage even more shareholders to get out of the stock ahead of the planned merger with privately held Albertsons.

Analysts are expecting a net loss of $0.01 per share on $5.57 billion in revenue. The consensus price target is $2.08, and the 52-week range is $1.38 to $4.87. Shares closed Tuesday at $1.65, up about 2.5% (four cents) on the day. Since the proposed merger was announced on February 20, Rite Aid shares have dropped 25%.

Partly that’s due to the completion of the sale of more than 1,900 Rite Aid stores to Walgreens Boots Alliance Inc. (NASDAQ: WBA), leaving Rite Aid a lot smaller than it was a year ago when Walgreens offered to buy the company for $6.50 a share. That deal was later abandoned when antitrust regulators indicated it would not be approved.

At the end of the two-week short interest reporting period ended March 29, nearly 164 million Rite Aid shares were short. That represents about 15.5% of the total float and is almost 12% higher than short interest on March 15.

Short sellers appear to be betting that investors who still hold Rite Aid shares will recognize that the deal with Albertsons, which values Rite Aid stock at $0.183 in cash per share plus one share of Albertsons stock, is very likely worth less than $1.60. Given that Albertsons is not publicly traded and no one knows for sure what a share of its stock is really worth, this may be a good bet.

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