Retail News Breaks
Rite Aid nixes reverse stock split
July 1st, 2009
CAMP HILL, Pa. – Rite Aid Corp. has canceled a planned reverse stock split after regaining compliance with the New York Stock Exchange's minimum share price listing rule.
The drug store chain said NYSE notified the company Wednesday that it met the requirement to stay listed on the exchange because its closing share price on June 30 and its average closing share price for the 30 trading days up to that date were above $1.00.
Rite Aid's shares closed Wednesday at $1.54, up 3 cents.
As a result, Rite Aid said it does not plan to implement a reverse stock split approved December 2 by its board and stockholders.
On October 17, the company had unveiled plans for either a 1-for-10, 1-for-15 or 1-for-20 reverse stock split after being informed by NYSE that it did not meet the minimum share price requirement. Under a reverse stock split, shareholders have fewer but higher-priced shares, and their total investment stays the same.
But NYSE announced in late February that it would delay applying its stock price criteria until June 30 because the severe market downturn had pushed an unusually high number of listed companies below its $1.00 share price requirement.
In March, Rite Aid reported that its board had postponed the reverse stock split because NYSE’s suspension of the minimum share price rule gave the company additional time to regain compliance.
Rite Aid's shares fell below $1.00 last September but closed at $1.06 on May 11 and have not closed below $1.00 since then, reaching a high of $1.74 in early June. As of Wednesday's market close, the company's shares had a 52-week price range of 20 cents to $1.97.
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