Rite-AID (RAD) Overdone or Done In? Message Board

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Non-Tech : Rite-AID (RAD) Overdone or Done In?

RAD 0.648

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Oct 16 5:00 PM EST

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To: Marty Rubin who wrote (648)	1/16/2002 9:50:22 PM
From: KJ. Moy	Read Replies (1) of 700

Besides the obvious problem of a poor quarter, following may be part of the cause for the descent. From a PR back in Aug 16/2001 for the class action settlement : <<If the value determined is less than $7.75 per share, Rite Aid has the option to deliver any combination of common stock, cash and short-term notes, with a total value of $155 million.>> Share price depends on the average share price for 10 days started from 1/11/2002. My conspiracy theory goes something like this. Several large recipients of this settlement were/are selling RAD short now in anticipation of receiving shares at current or lower prices. Since price is artificially kept low, most likely it will rebound after this 10 days period. However, these short sellers (in addition to regular short sellers) are facing a risk of RAD issuing the combination of some cash, short term notes and RAD shares per PR of Aug16/01. The risk is that share price jumps up much more than their short prices in a hurry. They end up losing money. So, it's a high stake poker game from now until 1/25/02 (end of 10 days period). Who's going to blink first? Above is all my speculation. Take it for whatever it's worth.

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