Rite Aid reportedly prepares bankruptcy filings while facing opioid lawsuits
Rite Aid (RAD) shares slide lower this morning as the pharmacy chain prepares bankruptcy filings while dealing with lawsuits over the sale of opioids, according to the Wall Street Journal. Yahoo Finance Live monitors the company's stock action year-to-date and how Rite Aid compares to the performance of competitors CVS and Walgreens (WBA).Video Transcript
BRAD SMITH: Rite Aid shares, they are in focus this morning. They're slipping as the company reportedly plans to file for bankruptcy as it faces several lawsuits over the chain's alleged role in the sale of opioids, according to "The Wall Street Journal" here.And, of course, you're taking a look at shares reacting, they are down by about 3.6% now. Of course, just a 3-cent move or a 2-cent move gives you that kind of percentage change here.
This has long been kind of an embattled longer term story for Rite Aid, whether you think about the number of locations that they sold off years ago and just to make sure that they could kind of right size their own structure.
But then additionally, the heated competition in the PBMs' business right now with CVS and Walgreens Boots Alliance really being some of the standard bearers for that, as well as Express Scripts and some other names, of course, over the years.
But for the majority of how this has shifted and for some of the drugs themselves that could be more generically manufactured that are now in terms of a distribution have more competition from the likes of Amazon and the acquisition of PillPack, and even into Mark Cuban's Cost Plus.
I think that's where it created even more of a headwind for Rite Aid now at the store level too that they still operate. Because if it's just online distribution for a company and Amazon and PillPack, they don't have to worry about necessarily the same type of storefronts, even though they could essentially take PillPack into all those Whole Foods locations as well.
All that considered though, it's been a rough go for the past several years here for Rite Aid.
RACHELLE AKUFFO: It's true. I mean, you have to wonder why they weren't as nimble as, say, a CVS and having some of these partnerships. We knew that obviously, with a lot of the build up from COVID and people sort of going in to get their shots, we knew that was going to start trailing off.
CVS was much more proactive about looking at these partnerships. And then when you factor in this alleged oversupply of opioids that Rite Aid has been accused of, also about more than $3 billion in debt, Rite Aid really just didn't keep up with the market. And even when you go into the stores, some of the inventory, some of the shelves tend to be a little bit emptier.
So it seems like, I don't know if there was a mismatch between customer demand and inventory, but Rite Aid just not really able to right its ship at the moment and certainly not able to make some effective partnerships in that space as well.
Rite Aid reportedly prepares bankruptcy filings while facing opioid lawsuits
Rite Aid (RAD) shares slide lower this morning as the pharmacy chain prepares bankruptcy filings while dealing with lawsuits over the sale of opioids, according to the Wall Street Journal. Yahoo Finance Live monitors the company's stock action year-to-date and how Rite Aid compares to the...
