A Rite Aid reverse split (NYSE:RAD) may be happening after the company received a noticed on Friday from the New York Stock Exchange, notifying the pharmacy chain that its stock is no longer in line with the rules of the exchange due to its shares failing to maintain a price of at least $1.00 a piece over a 30-day trading period.
The drugstore giant has seen its stock decline a whopping 64% over the last 12 months, reaching a low price of 75 cents per share as of Thursday’s close, well below the $2.11 per share it was worth on Jan. 3, 2018. The stock’s price has been dancing under the $1 per share mark over the last month, leading to the NYSE notice.
The price is a violation of the exchange’s rule as the average share price needs to surpass the $1 mark. The NYSE has informed Rite Aid that the pharmacy company has six months from the Jan. 3 notice to find a way to boost its average share price to above $1 for a whole month.
In response to this notice, the company has listed a reverse stock price, which allows companies to combine shares with the goal of increasing the stock’s price. In 2018, Rite Aid missed out on an opportunity to take over Albertson’s in a deal that seemed like it was going to come to fruition–the deal was dropped as investors pushed back.
RAD stock is up about 2.1% on the news that it was considering a reverse split.