Rite-Aid rips off the bandaid of Albertsons merger talks

In a not so surprising move, Rite-Aid ($RAD) has tossed out plans to acquire Albertsons, and is seeing some immediate benefits from it, jumping about 3.5% at end of day (including after-market trading). So why does this make sense?

Looking back to January of 2017, Cerberus Capital (led by Steven Feinberg) lost a bid to Walgreens for the 865 drugstores that were up for sale by Rite-Aid. An interesting point of note, is that he placed the bid through Albertsons stores back then, and clearly has an interest in seeing the love child of Albertsons / Rite-Aid. Rite-Aid would have been a subsidiary of Albertsons, and there are some analysts who are looking at the deal saying that it was a sort of “reverse IPO” as it would have allowed Albertsons to become a public company overnight, much to the delight of Albertsons activist investors.

Spill on aisle five of the Rite-Aid merger

When you go to spend $24 billion on something, you usually need to make a case for it. Both companies brought up the fact that they are facing increased competition to Amazon ($AMZN), as well as fighting off industry threats such as WalMarts ($WMT) curbside grocery pickup, and Kroger’s ($KR) ClickList. Unfortunately, this strategy didn’t work out, and Rite-Aid investors are being rewarded.

Industry analysis of Rite-Aid shows small upside

Rite-Aid is a classic example of a company that you might want to stay far away from. Increased competition from high-data tech companies, expensive leases, high cost of staff, no dividend payment, and only modest (and we mean really modest) growth opportunities within the stock all mean you should sit this one out. Not only are there massive issues with this, you have a company who has basically failed to keep up with modern times, and is not staying market relevant.

So far, $RAD has lost ~26% this year, and ~11% year to date. Not good, and is still down ~38% from its 52 week high. A stock showing this much red will only be a good investment if you like throwing money away.

January 2, 2021 Update: We have just announced our BEST STOCK NEWSLETTER of 2020 AWARD!

CLICK HERE to find out which stock newsletter was up 78% in 2020 (and whose 2019 picks are now up 113%).

*** Our Award for BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated January 2, 2021

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

Five of their 2020 stock picks have doubled and the average return of all 24 of their stock picks for 2020 is up 78%!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years and 120 stock picks. As of Friday, January 1, 2021 the Motley Fool's January stock pick (TSLA) is up 720%, their March pick (ZM) is up 172%, their April pick of SHOP is up 226% and their June pick CRWD is up 120%; and another two have more than doubled. In addition, 10 of their 2019, 12 of their 2018, 11 of their 2017, 15 of their 2016. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 209%--tht means over the last 5 years their stock picks, on average, have TRIPLED!

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. The important thing about the Fool stock picks is you have to buy them the day they are recommended because they usually pop 5-10% in the first 72 hours after the release their recommendation. You sure don’t want to risk missing out on their next pick.

Normally the Fool service is priced at $199 per year but they are currently offering a NEW SUBSCRIBER DISCOUNT that allows you to get theiir next 24 stock picks for just $99/year. HERE is the LINK to visit their New Subscriber Discount page.

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)

Comments are closed.