New York City Rite Aid plans a reverse stock split after the company's shares fell below $1, Bloomberg reported Friday. The reverse split will allow Rite Aid to to keep its shares traded on the New York Stock Exchange (NYSE).
The board has yet to determine what ratio the reverse split will take, the drug store chain said Friday in a statement. The split will be completed by December after a special shareholders meeting.
Rite Aid fell 7 cents, or 9%, to 71 cents at 4:15 p.m. in New York Stock Exchange composite trading Friday. Investors will have fewer shares after the reverse split, though the value of their holdings will remain the same.
The NYSE notified Rite Aid Thursday that its stock had traded below $1 for the past 30 sessions, putting the company out of compliance with exchange rules. The company has six months to rectify the situation.
Rite Aid has posted a string of quarterly losses, as the company has struggled to compete with bigger rivals CVS Caremark and Walgreen. In September, Rite Aid increased the estimate of its fiscal-year loss for the second time in three months. The chain cited the weak economy and slowing trends in prescription sales.
Also, Rite Aid has struggled with its $4 billion acquisition of Brooks and Eckerd, which closed more than a year ago.