Rite Aid Corp., the money-losing U.S. drugstore chain, plans a reverse stock split after the company's shares fell below $1.
The board has yet to determine what ratio the reverse split will take, Camp Hill, Pennsylvania-based Rite Aid said today in a statement. The split will be completed by December after a special shareholders meeting, the company said.
Rite Aid, the third-biggest U.S. drugstore chain, fell 7 cents, or 9 percent, to 71 cents at 4:15 p.m. in New York Stock Exchange composite trading. Investors will have fewer shares after the reverse split, though the value of their holdings will remain the same.
Rite Aid has posted a loss in five straight quarters because of higher financing costs and declining sales, driving its shares down 72 percent this year. The reverse split will allow Rite Aid to remain on NYSE, which notified the company yesterday that it had violated listing standards because the average closing stock price fell below $1 for 30 straight trading days.
Rite Aid, with almost 5,000 pharmacies, forecast a net loss in September of $445 million to $535 million, or 56 cents to 67 cents a share, for the year that ends Feb. 28. The drugstore chain had forecast a loss of as much as 52 cents.
