Rite Aid stock is experiencing extreme turbulence: Here’s why

CNN/Stylemagazine.com Newswire | 8/28/2023, 12:46 p.m.
Shares of Rite Aid were slightly lower Monday after soaring more than 20% higher in morning trading.
Rite Aid is currently the seventh largest pharmacy chain in the US, with more than 2,300 stores in 17 states. Mandatory Credit: Justin Sullivan/Getty Images

Originally Published: 28 AUG 23 11:40 ET

By Nicole Goodkind, CNN

New York (CNN) — Shares of Rite Aid were slightly lower Monday after soaring more than 20% higher in morning trading.

The steep swings come after Rite Aid saw its price of shares tumble Friday amid reports that the drug store chain was preparing to file for bankruptcy.

The Philadelphia-based chain sank 51% on Friday setting a new all-time low of $0.71 a share. Shares of Rite Aid (RAD) are down more than 91% since this time last year.

Friday’s plunge came after The Wall Street Journal and Bloomberg reported that Rite Aid was preparing to file for Chapter 11 bankruptcy. Rite Aid is currently about $3.3 billion in debt and has been embroiled in a legal battle for allegedly filling unlawful opioid prescriptions.

The Department of Justice filed suit against the company in March, claiming that it knowingly processed “unlawful prescriptions for controlled substances.” That stands in violation of False Claims Act and Controlled Substances Act.

Filing for bankruptcy would restructure Rite Aid’s debt, including any legal liabilities.

Rite Aid told CNN in a statement Friday that it “does not comment on rumors and speculation.”

Rite Aid is currently the seventh largest pharmacy chain in the United States, with more than 2,200 stores in 17 states.

Purdue, Endo Pharmaceuticals and Mallinckrodt have also declared bankruptcy after facing similar opioid lawsuits.

More than 760,000 people have died from a drug overdose since 1999, according to the Department of Health and Human Services. About 75% of drug overdose deaths in 2020 involved an opioid.

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