MONSEY, N.Y., Sept. 29, 2022 (GLOBE NEWSWIRE) -- The law firm of Wohl & Fruchter LLP is investigating whether Rite Aid Corporation (NYSE: RAD) (“Rite Aid”) has violated federal securities laws. If you suffered losses as a result of today’s sharp drop in the price of RAD, and have questions about your legal rights, please contact us at the following link to discuss your options at no charge:
https://wohlfruchter.com/cases/rite-aid-corporation/
Alternatively, you may contact us by phone at 866-833-6245, or via email at alerts@wohlfruchter.com.
Why is there an investigation?
Elixir, is a fully owned subsidiary of Rite Aid that offers pharmacy benefit management (PBM) services, Medicare-approved prescription drug plans, mail and specialty pharmacy solutions, and prescription discount programs to millions of members nationwide.
On June 10, 2022, Rite Aid filed a letter with the Securities and Exchange Commission (“SEC”) from Rite Aid’s President and Chief Executive Officer, Heyward Donigan, stating among other things that “[o]ur Elixir account and sales teams are gaining momentum, and we are executing more efficiently by consolidating functions. And the market is noticing—we have added 34,000 individuals covered by Elixir’s PBM services since January 1, 2022, with many more in the pipeline. And we just won the renewal of our largest health plan client in a very competitive bidding process.”
Subsequently, on an earnings call held on June 23, 2022, Donigan advised analysts concerning Elixir that “the selling season is still in progress, and we’ve got close to 1 million lives remaining in the pipeline for January 1, 2023.” Elixir’s Chief Operating Officer, Chris DuPaul, added that “we are still expecting to have the strongest selling season that we’ve had in several years at Elixir. And so we feel really good about where our life count is headed.”
On September 29, 2022, however, Rite Aid announced a $252.2 million charge for the impairment of goodwill related to the Elixir subsidiary. On an earnings call held later in the day, Rite Aid’s Chief Financial Officer, Matt Schroeder, explained that the large impairment charge was triggered by a change in Rite Aid’s estimate of lives covered by Elixir for 2023 based on the latest selling season.
On news of the impairment charge, RAD stock dropped over 28% by 3:00 P.M. Eastern on September 29, 2022.
About Wohl & Fruchter
Wohl & Fruchter LLP, with offices in New York City and Monsey, has for over a decade been representing investors in litigation arising from fraud and other corporate misconduct, and recovered hundreds of millions of dollars in damages for investors. Please visit our website, www.wohlfruchter.com, to learn more about our Firm, or contact one of our partners.
Contact:
Wohl & Fruchter LLP
Joshua E. Fruchter
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alerts@wohlfruchter.com
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Source:
Wohl & Fruchter LLP2022 GlobeNewswire, Inc., source Press Releases
RITE AID CORPORATION 
