Rite Aid eyes reverse stock split
Rite Aid’s board has approved a move aimed at being compliant with the New York Stock Exchange’s listing rules. The board on Friday approved a reverse stock split, which is subject to stockholder approval. It has slated a special stockholder meeting on March 21 for voting on the measure.
If approved, Rite Aid will reverse split its stock at a ration of either 1-to-10, 1-to-15 or 1-to-20, such that 10, 15 or 20 shares of common stock will convert into a single share. The result is meant to be fewer, higher-priced shares held by each stockholder. The company said it would not have an impact on stockholder rights or on Rite Aid’s business operations or debt.
Rite Aid will be in compliance with NYSE’s share price listing rule if it manages to maintain at least a $1 closing share price for one month during a six-month period that ends July 30, or if it manages a $1 average closing share price for the preceding 30 consecutive trading days. As of market close Jan. 25, the company has had a closing share price below $1 since Dec. 10.
The company said that even if stockholders approve a reverse split, the board may delay or abandon the strategy at any time before it becomes effective if they determine it’s not in the company’s or shareholders’ long-term interest.
Any Rite Aid stockholder as of Feb. 5 will be able to vote at the special meeting in March.
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