Rite Aid Corporation (NYSE: RAD) is having an incredibly strong start to the trading session this morning, following up on strong gains that we saw yesterday. With volume running high, there’s definitely strong interest in the stock. But what’s the big deal? Why is the stock flying? Today, we’ll talk about what’s going on, what we’re seeing from the stock today, and what we’ll be watching for ahead.
Why Is RAD Surging?
As mentioned above, for the past 2 trading sessions, RAD has seen some incredible gains. So, what’s the big deal? It has to do with the recent deal struck between Rite Aid Corporation and Walgreens Boots Alliance Inc (WBA). Under the deal, it was announced that RAD would sell WBA a total of 1,932 stores, 3 distribution centers, and the related inventory associated with the sales.
With that deal announced back in September, many are asking, “Why is the stock flying today, more than 2 months later?” The answer is simple. Recently, RAD announced that it has completed the “pilot closing” of its amended asset purchase agreement. This means that the closing of the deal is one step closer, ultimately proving to be a source of excitement for investors.
What We’re Seeing From The Stock
One of the first things we learn when we start to dabble in the market is that the news causes movement. With the news surrounding the pilot closing completion of the sale of assets to WBA, RAD investors are proving to be overwhelmingly excited. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (10:55), RAD is trading at $2.16 per share after a gain of $0.26 per share (13.42%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on RAD. In particular, we’re interested in following the asset sale agreement between Rite Aid and Walgreens Boots Alliance. Of course, when the deal closes, it will give Rite Aid a good amount of capital to work with to restructure its operations and focus on value-driving concepts. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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