Rite Aid shareholders have approved the company's reverse stock split, in a move aimed at boosting the drugstore chain's shares high enough to continue trading on New York Stock Exchange.
Shares of Rite Aid opened Thursday at 70 cents per share. They need to be above $1 to comply with the exchange's trading rules. In a reverse stock split, companies combine shares to increase the price.
The company's board of directors may choose a stock split ratio of 1-for-10, 1-for-15 or 1-for-20, Rite Aid said in a statement. The board will determine the date at which the split becomes effective at a later time. About 78 percent of shareholders voted in favor of the move, the company said, citing preliminary results.
Rite Aid's stock lost a penny on Thursday, bringing them to trade at 69 cents per share. The company's shares have lost 55 percent of their value over the past year. They've hovered under $1 since December, putting them in violation of NYSE's rule and in jeopardy of being delisted.
Rite Aid has been struggling to find a way forward after two failed mergers in two years. Regulators thwarted Rite Aid's merger with Walgreens Boots Alliance in 2017, forcing Rite Aid to sell a chunk of its stores and leaving the chain with a much smaller footprint than its rivals. Then in 2018, Rite Aid abandoned its planned merger with grocery chain Albertsons amid shareholder opposition, throwing its prospects into question.
The drugstore chain last week said CEO John Standley, Chief Financial Officer Darren Karst and Chief Operating Officer Kermit Crawford would exit the company. Rite Aid also said it would slash about 400 corporate positions, which the company said would result in annual savings of about $55 million.