Rite Aid Throws In The Towel

Two months after we last spoke about it, pharmacy retailer Rite Aid is back in the news again. Unfortunately, for a similar reason as last time. 👎

In August, the drugstore chain warned it was preparing for bankruptcy as it buckled under mounting debts and lawsuits over its role in the opioid epidemic. Today, the company officially filed for Chapter 11 bankruptcy protection in New Jersey, appointing a new CEO to lead the restructuring plan. 📝

It reached a deal with creditors on a restructuring plan that involves evaluating its retail footprint and closing underperforming stores. Additionally, its lenders extended $3.45 billion in new funding, which will “provide sufficient liquidity” to execute its restructuring plan.

Like its peers CVS Health and Walgreens Boots Alliances, the drugstore chain has faced several headwinds. They include slowing discretionary spending, reduced pharmacy sales in a post-pandemic world, and trouble keeping its pharmacy staff happy during a worker shortage. However, unlike its larger competitors, the smaller chain is far less diversified and has seen its brand’s market share eroding as Amazon and others enter the space. 🏬

Most recently, the company’s quarterly revenue fell 6% YoY to $5.65 billion, with it expecting to lose $650 to $680 million for the fiscal 2024 year that ends in February. And although its pharmacy business has held up decently well in the face of its headwinds, it’s not enough to offset the rest of the business’ weakness. 📊

To lead the turnaround, the company added Jeffrey Stein to its board of directors and made him chief executive officer (and chief restructuring officer). The board hopes his strong track record in guiding companies through financial restructurings will help Rite Aid come out on the other side with a more sustainable business.

$RAD shares were down 6% pre-market before being halted. They did not reopen for trading, but the company’s bonds were sold heavily throughout the day. Many investors and traders are fearful of another potential plunge once trading resumes. However, others are eyeing the situation given its “meme stock” potential. Time will tell. 😬

Nio & Nikola’s Never-Ending Story

No matter the day, there seems to be an endless stream of electric vehicle (EV) industry news. Let’s get into today’s headlines. 📰

First up is China’s Nio, which just received an additional $2.2 billion investment from Abu Dhabi’s CYVN Holdings, which raised its stake to 20.1%. The fund had last invested in Nio during July, with a $1 billion investment. 

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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. 👇

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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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AI’s Copyright Crisis Begins

We all knew copyright law would be a key issue at the heart of the artificial intelligence (AI) revolution, but we didn’t know when. Well, the time has come. ⌛

Today, The New York Times filed a lawsuit against Microsoft and OpenAI, accusing them of infringing copyright and abusing the newspaper’s intellectual property. In its court filing, the publisher said it looks to hold the two companies accountable for the “unlawful copying and use of The Times’s uniquely valuable works,” claiming billions in statutory and actual damages.

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