Very surprising that the merger deal was cancelled at the last minute without warnings and the day after it was rumored that it was going to happen.
Now that being said, where in the world is going RAD ?
Will they use their 5B $ and repay back old debts ?
What would be the impact ?
Can we believe in a turnaround ?
Any other suspected merger possibilities ?
What about deferred taxes assets ?
So in my humble opinion, RAD is at the time victim of a failed merger and should continue to trade sideline for the next couple of weeks.
First the transaction will not impact results for another 2-3 months because the selling of those stores is planned on a six months span.
IF RAD decide to really use their 5B$ to repay debts, that would leave about 2B$ in long term debts and even if number of stores if almost cut in half, it would be a lot more manageable unless WBA got their best stores and left the crap behind. That we do not know yet......and we will have a better idea on the next quarter report based upon sales per location and profit per location compare to actual figures.
Then, during that time, anything could happen and a new buyer could come up like Amazon trying to get their boots into the pharmacy business without all the preliminary work.
Rite Aid also has a deferred 1,5B$ in deferred tax assets that could be valuable to some buyers.
So as of now, RAD could be interesting at today's value if you can swallow the ups and downs for the next quarter.
This will be a highly speculative stock going forward but as usual, nice profit is always a direct conclusion of a highly volatile stock.
Stay highly prudent.
Now that being said, where in the world is going RAD ?
Will they use their 5B $ and repay back old debts ?
What would be the impact ?
Can we believe in a turnaround ?
Any other suspected merger possibilities ?
What about deferred taxes assets ?
So in my humble opinion, RAD is at the time victim of a failed merger and should continue to trade sideline for the next couple of weeks.
First the transaction will not impact results for another 2-3 months because the selling of those stores is planned on a six months span.
IF RAD decide to really use their 5B$ to repay debts, that would leave about 2B$ in long term debts and even if number of stores if almost cut in half, it would be a lot more manageable unless WBA got their best stores and left the crap behind. That we do not know yet......and we will have a better idea on the next quarter report based upon sales per location and profit per location compare to actual figures.
Then, during that time, anything could happen and a new buyer could come up like Amazon trying to get their boots into the pharmacy business without all the preliminary work.
Rite Aid also has a deferred 1,5B$ in deferred tax assets that could be valuable to some buyers.
So as of now, RAD could be interesting at today's value if you can swallow the ups and downs for the next quarter.
This will be a highly speculative stock going forward but as usual, nice profit is always a direct conclusion of a highly volatile stock.
Stay highly prudent.
