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NYSE notifies Rite Aid of share price noncompliance
August 3rd, 2010
CAMP HILL, Pa. – Rite Aid Corp. said the New York Stock Exchange has informed the company that the price of its common stock has fallen out of compliance with the exchange's minimum share price listing rule.
NYSE requires the average closing price of a listed company's common stock to be at least $1 per share over a consecutive 30 trading-day period. Rite Aid said Tuesday that it was notified of noncompliance on July 30.
On that day, Rite Aid shares closed at 99 cents. The stock dipped below $1 on June 30, closing at 98 cents per share. During that time span, shares ranged from a low of 88 cents to a high of 99 cents. The company's shares closed at 97 cents on Tuesday.
Rite Aid noted that it has six months from the receipt of the notice to regain compliance with the minimum share price rule or until the drug store chain's next annual shareholder meeting in June 2011, if stockholder approval is required to remedy the price shortfall through, for example, a reverse stock split.
During that time span, Rite Aid stock continues to be listed on NYSE and trade as usual. Rite Aid said it's in compliance with all other NYSE listing rules.
Under NYSE rules, Rite Aid can regain compliance during the six-month cure period by having an average closing share price of at least $1 for a 30-day trading period ending on the last day of a calendar month and at least a $1 per share price on the last day of that month or on the last day of the cure period.
Rite Aid said that on July 27, its board approved a reverse split of the company's common stock, subject to shareholder approval, if such a split is necessary to cure the price deficiency.
Last summer, Rite Aid canceled a reverse stock split after regaining compliance with NYSE's minimum share price listing rule.
The company's shares had fallen below $1 the previous September, and then in December its board and shareholders OK'd a plan for a reverse stock split. But NYSE announced the following February that it would delay applying its stock price criteria until the end of June because the severe market downturn had pushed an unusually high number of companies below the $1 share price requirement. And then in March, Rite Aid reported that its board had postponed the reverse stock split because NYSE’s suspension of the rule gave the company more time to regain compliance, which it did.