Totally RAD

Right after the beginning of the year, I bought 400 shares of Rite-Aid (RAD), click here to read that blog post.  My thought process was that the stock would either make a recovery or they would be bought out.  Today a big announcement came! 

Today the latter happened!  There was an announcement that the Albertson Company would be buying RAD in a deal worth $24 billion.  Pre-market trading sent the price from $2.13 to $2.80!  My goal was to sell this stock for $2.75 and this looked like it was my opportunity.

I watched with anticipation as the markets opened at 9:30 am, the price was swinging wildly in pre-market trading, up to nearly $2.80 and then back down to $2.30.  When the markets opened, the stock dropped to $2.15.  I checked a few times during the day and the price never got above $2.22 again.  As the day drew to a close I read that the deal was not a cash deal, instead, it was a stock & cash deal.  Since Albertson is not currently publicly traded, I don’t know their market value.

The whole deal seems to be an attempt to compete with Amazon by combining healthcare and grocery.  It was all getting too messy for me and I decided it was better to break even on this deal rather than wait it out and take my chances.

In my E*Trade brokerage account I made the following transaction:

I sold all 400 RAD shares for $2.20 each, total cashout was $872.97.

Despite having bought for $2.18 and selling for $2.20, I posted a loss of $6.01 on these trades because of the transaction fees.

Leave a Reply

Your email address will not be published. Required fields are marked *