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Vote Yes On Rite Aide Merger And Repeat Last Years Stock Fall

|Includes: Rite Aid Corporation (RAD)

Vote yes and repeat last years stock downfall.

Albertsons Rite Aide will be short sellers easy target.

Albertsons will IPO Rite Aide post Chapter 11 for windfall gain.

Any Rite Aide long voting yes will surely repeat last years stock fall.

Personally I expect a relentless short attack at the open of trading.Albertsons projects initial stock price of 20 to 23 dollars. First short attack could drop price 10 percent on day 1 and scare most rational investors and no institutional investors would wager on a falling stock. Management will dilute the shares as they project 75 million shares initially and nearly 200 million to reach the 300 million goal, another green light to short, and stock could be cut in half in 30 days. Ten bucks at 30 days. Expect no good news, instead a constantly falling stock price similar to last years painfull decline. At 180 days the ex Rite Aide share holders will be allowed to sell their shares (yes, you must hold the sinking stock until then), and big green light for another short wave  and another 50 percent fall, expect $5 range 6 to 7 months out. Then the terminal decline begins as all confidence is lost and 200 million lost in last 2 quarterly reports. Vote yes and loose 75 percent in 6 months. Warren Buffet says "rule number one never lose money, rule number two never forget rule number one". Not a Buffet stock, my friends.

Albertsons Rite Aide will have $ 17 billion debt, and be unable to make interest payments on the debt and will surely default in the end (12 billion current debt ,$ 2 billion to close the deal (pay off to instructional investors to vote yes) and $ 3 billion Rite Aide debt. They are loosing astronomical amounts of money  (see Albertsons your friendly neighborhood grocery loosing hundreds of millions of dollars $ 373 million last year,502 million loss year before and 1.2 billion before that. Aldi is moving in and advertising a 50 percent saving over traditional grocers. This price pressure will be too much  for Albertsons to avoid chapter 11. The saving grace will be that they will have a debt free Rite Aid they can sell in an IPO for 7 billion, and have controle of the entire business, with shareholders whiped out. They can then thank the institutional investors who took the bone they threw them and voted yes. Perhaps that is the hidden agenda.Albertsons bankers know  the Titanic already hit the ice berg, and are snagging Rite Aide on the cheap, offering Stanley and company a big pay package they never will collect.  Trash Rite Aid's previous debt and IPO it for 7 billion debt free. If not, the hidden agenda it is an obvious insurance policy, paid for by Rite Aide shareholders.

Yes, chapter 11 will save Albertsons and allow them to be profitable again. This is no different than what every airline did. Albertsons employees, all 280,000 deserve a profitable company but not at Rite Aides expense.

Vote no and an AMD like turn around is possible. Two years agoAMD was selling for well under 2 bucks was massively shorted and the story line was. They can not compete with there 2 larger competitors Intel and Navidia as they have a massive war chest and more advanced products and they lack the R and D to create new products and would brobably be bankrupt now if not for the Xbox and PlayStation contract. Profits were a penny a share or so and they were paying their debt as well. Then they changed management and they got the Apple contract, also got their boards to 14 nanometers  equal to intel and they exploded upward and the shorts fueled the fire as they were flushed out. Today AMD closed at 16.25 and they make 4 cents (not dollars) a share. The change was marker perception that began with Management change. Sounds like Rite Aide to me a broken stock and not a broken company

Vote yes and flush your money 

Vote no and the rally may begin

I am long Rite Aide and will sell all shares short with a yes vote and will double down on a no vote

Disclosure: I am/we are long RAD.