Rite Aid (NYSE:RAD) stock is taking a beating on Monday after bankruptcy reports claimed that the pharmacy chain is closing hundreds of stores.
According to these reports, Rite Aid is preparing to close between 400 and 500 locations. The company currently has around 2,100 stores. The locations it closes will either be sold or be taken over by creditors.
Insiders claim that this is part of the firm’s plan to reduce its roughly $3.3 billion in debt while preparing to face fines in connection to opioid lawsuits. Reports also claim that there is a “preference among a group of bondholders to liquidate an even higher number of stores.”
Here’s what a Rite Aid spokesperson said about the matter when asked by Forbes:
“Given the conversations remain ongoing, no decisions have been made at this time and we are focused on reaching an agreement with our financial stakeholders that will make Rite Aid stronger.”
How This Affects RAD Stock Today
Reports of the bankruptcy and store closures have shares of RAD stock falling 19.9% as of Monday morning. To go along with that, some 3.9 million shares have changed hands. To put that number in perspective, the daily average trading volume of RAD stock is above that at 6.4 million shares.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.