Sumary of Why Rite Aid Stock Is Climbing This Week:
- There was no major news out on the drugstore chain, but the stock did seem to benefit from a short squeeze as shares spiked early in the week, even on Monday when stocks broadly pulled back.
- So what As the influence of traders on forums like Reddit’s WallStreetBets has grown, it’s not uncommon to see stocks with high short interest move higher with little explanation.
- As a well-known brand and one with 22% of its shares sold short, the company fits the bill of stocks that would get attention from WallStreetBets, and at least a few traders on the discussion board have pushed for a short squeeze on Rite Aid.
- The stock jumped 6.8% on Monday on higher-than-normal volume even as the S&P 500 fell 1.6%.
- Johnson and three major drug distributors agreed to a $26 billion settlement to remove them from liability in the opioid crisis, and the prior week, Rite Aid and its pharmacy peers agreed to a $26 million settlement in an opioid lawsuit from two New York State counties, which could portend similar deals in the future.
- Without the related interest expense of $200 million a year, the company would be profitable, but the debt burden has been a nagging impediment in its turnaround attempts.