Rite Aid Reemerges (Again)

Rite Aid has been on the decline for a long time but is one of those stocks that occasionally pop back up on the radar. 🧭

Today, the pharmacy chain said it’s preparing to file for bankruptcy in an attempt to address mass federal and state lawsuits over its role in the sale of opioids. The Chapter 11 bankruptcy filing would cover its more than $3.3 billion debt load and pending legal allegations that it oversupplied prescription painkillers. πŸ’Š

However, the company said it hasn’t yet agreed on a settlement and is planning to treat them as general unsecured claims. That means they’d rank behind a company’s collateralized debt in bankruptcy and share only what’s left over after secured claims are paid in full. πŸ“’

The legal claims will likely cause Rite Aid to join pharmaceutical manufacturers Purdue Pharma, Mallinckrodt, and Endo International as companies at least partly bankrupted by opioid litigation. Suppose those cases are any indication of what could happen with Rite Aid. In that case, it’ll likely reach settlements of its opioid claims in bankruptcy that allocate more to opioid plaintiffs than other unsecured creditors.

The news sent shares of $RAD plunged to new all-time lows as fears that little to nothing will be left for common shareholders spread. We’ll see in the weeks ahead if it becomes a “meme stock” like other bankrupt companies have. But for now, things are looking pretty grim. 😬

What’s With All The Accounting Issues?

Accounting is the practice of using numbers to tell the story of a company’s past, present, and future. For an investor, these numbers and stories are the foundation of all decisions, so it’s imperative that they’re done correctly. And generally, they are.

But lately, there’s been an uptick in the number of accounting mishaps making their way into the financial markets. Today we got a few more instances of this problem, so let’s take a look. πŸ“

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Thailand Scores Major EV Win

Thailand has been helping lead the electric vehicle (EV) push, with the second-biggest economy in Southeast Asia looking to achieve carbon neutrality by 2050. ♻️

The country is known as the “Detroit of Asia,” serving as a major manufacturing hub. As part of that, it’s looking to make 30% of its car output electric by 2030 so that it doesn’t lose its leadership position in the EV transition. Its government is putting up major funds to help fund that, approving $970 million in tax cuts and subsidies to help encourage demand and boost local production. ⚑

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Trouble Continues For Telecoms

We last talked about Telecom stocks about six months ago, when their stocks came under significant pressure due to slowing growth, competition concerns, and regulatory issues. We then discussed them in October when investors dumped defensive stocks for higher-yielding treasuries with no risk.

Prices have since rebounded sharply with the broader market as investors priced in Fed rate cuts this year. However, Verizon was back in the news today for a not-so-great reason. Let’s dig in. πŸ‘‡

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Biotech Buyout Spree Continues

It may be the last week of the year, but many companies are rushing to get deals done before year-end. Two significant transactions in the biotech space were announced today, so let’s dive in. πŸ‘‡

The first deal involves RayzeBio, which raised $358 million via an initial public offering (IPO) just three months ago. However, its time as a public company is being cut short by Bristol Myers Squibb, which is acquiring the radiopharmaceutical therapeutics company for $62.50 per share in cash. πŸ’°

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