The new trading week got started as lethargically as the prior one ended. With nothing new to light a fire under traders, the S&P 500 drifted 0.2% lower on Monday to end the session at 2,373.47.
That would have been a victory compared to the baths Rite Aid Corporation (NYSE:RAD), Kohl’s Corporation (NYSE:KSS) and Deutsche Bank AG (USA) (NYSE:DB) took today, however. These three names led the bearish parade.
Here’s what investors need to know.
Deutsche Bank AG (USA) (DB)
Shareholders knew it was coming — Deutsche Bank warned them back on Mar. 6 it would be issuing rights to newly minted shares that would be dilutive if used. There’s just something about seeing it happen though, and hearing the final stunning numbers, that spooked the market into selling Deutsche Bank.
Per this morning’s press release, struggling Deutsche Bank AG is raising $8.6 billion by issuing 687.5 million shares of DB at a price of 11.75 euros each. That’s 35% less than last week’s closing price.
It could have been worse for Deutsche Bank, and arguably should have been. The issuance of those rights has the potential to increase the number of outstanding shares by half. However, DB stock has been beaten down more than 60% since early 2014, with this latest maneuver not being an entirely unexpected one.
DB ended the day down 3.4%.
Kohl’s Corporation (KSS)
Don’t look for a specific reason Kohl’s shares were in the red to the tune of 4.8%; you won’t find one. Just know that it’s all part of an ongoing rout of the retail sector, as apparel retailing loses its appeal and relevancy to goods and services that can be ordered (and even delivered) digitally.
Those flames were fanned in the general direction of KSS today possibly in part due to comments from the Motley Fool’s Daniel B. Kline, who (accurately) detailed exactly how Amazon.com, Inc. (NASDAQ:AMZN) is doing what many thought was impossible just a few years ago — take a bite out of brick and mortar apparel retailing.
Macy’s Inc (NYSE:M) was off by 3.8%, putting its ongoing downtrend into a higher gear.
Rite Aid Corporation (RAD)
Last but not least, the sordid saga of the attempt by Walgreens Boots Alliance Inc (NASDAQ:WBA) to acquire rival Rite Aid continues to twist and turn, dragging RAD down to the tune of 2.9%. That dip earned the stock a spot on the daily ‘Worst 3’ list for a second time this month.
It has been an adventure to say the least. Walgreens Boots Alliance announced its intentions in 2015, but has bumped into several regulatory roadblocks in the meantime. Walgreens’ M.O. has been a vow to shed more stores than initially planned to secure a green light from an understaffed Federal Trade Commission. But, each store Walgreens doesn’t buy from Rite Aid lowers the value of RAD shares. The company reportedly willing to buy the stores Walgreens can’t, Fred’s, Inc. (NASDAQ:FRED), may not be as generous as Walgreens Boots Alliance was going to be … if a deal gets done at all.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.