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.