Rite Aid has advised shareholders that the New York Stock Exchange (NYSE) may move to delist the company's stock after a couple of weeks of it trading below $1 a share. The NYSE requires companies to maintain a closing average of $1 per share for 30 days of trading to maintain its listing.
The drugstore chain indicated the NYSE has not notified it of being noncompliant. The company would be allowed to continue trading for up to six months following a letter of non-compliance from the NYSE. It would be delisted if it were not able to maintain the $1 closing average for its shares over the 30-day period.
According to a report on The Patriot-News website, Rite Aid has said it will "take steps to cure any such non-compliance."
John Ransom, an analyst with Raymond James, told The Associated Press in an email, "All stocks have gotten destroyed lately, especially any company with a shaky balance sheet. Rite Aid has the worst balance sheet of any company I follow."
Rite Aid's shares closed at 52 cents yesterday.
Discussion Questions: From a practical standpoint, what does Rite Aid's share price mean to the day-to-day running of the business? Beyond its share price, what does Rite Aid need to do to fix itself?