Rite Aid Shareholders Approve Plan For Reverse Stock Split

(RTTNews) - Rite Aid (RAD) shareholders have approved a plan for reverse stock split of the company's shares.

The reverse stock split will lower the drugstore chain's number of outstanding shares and in turn boost its share price enough to continue trading on New York Stock Exchange.

Rite Aid shares are currently trading below $1, which puts the company at risk of being delisted from NYSE. The stock exchange's trading rules require a company's share to trade above $1 for 30 straight trading days.

A reverse stock split or reverse split is a process by which shares of a company are effectively merged to form a smaller number of proportionally more valuable shares.

Rite Aid's board of directors may decide a stock split ratio of 1-for-10, 1-for-15 or 1-for-20. 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.