Rumors that the merger between Rite Aid Corporation (NYSE:RAD) and Walgreens Boots Alliance Inc (NASDAQ:WBA) would be approved by the Federal Trade Commission (FTC) when it met this week sent RAD soaring on Monday, rallying 30% to levels not seen in nearly two months. However, news out Thursday morning that Walgreens had decided to amend its original offer caused RAD stock to give up those gains and then some.

While Walgreens had initially planned to buy Rite Aid outright, management instead decided to purchase 2,186 of its stores for $5.2 billion. That would still leave Rite Aid with more than half of it stores (2,350 to be exact) under its management after the deal closes.

The revised terms came out before the FTC was able to rule on the original offer on Thursday afternoon. It had seemed a certainty on Monday, but by Wednesday it was looking as if the merger would not be approved.

I suspect Walgreens was confident that it wouldn’t, which is why management has agreed to pay Rite Aid $325 million for cancelling the merger on top of the $5.2 price tag for its retail locations. In the long run, the company believes the payment will be mitigated by the money it will ultimately save by not going through with the original deal.

That was the big news item of the day, but flying under the radar were both company’s earnings reports.

Rite Aid released not-so-stellar numbers, losing an adjusted 5 cents per share on the bottom line while store sales fell 5%. Analysts had been expecting a loss of a penny. Walgreens, on the other hand, saw a 2% increase in sales and 5% growth in profit.

At this point, I’m staying away from the entire sector. RAD stock has gone completely toxic, but I don’t see much in WBA that compels me to buy at the moment, either.

I’m not a fan of the drugstore space, and do not see enough upside potential to buy in the near-term.

Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt is currently in the midst of an exciting launch centered around his trademark three-prong investing approach that targets the mega-trends old Wall Street is missing out on. His next-gen investing strategy is delivering enormous profits in stocks and ETFs. Click here for more information on his latest venture.