Lawsuit filed for Investors in shares of Rite Aid Corporation (NYSE: RAD)

An investor, who purchased shares of Rite Aid Corporation (NYSE: RAD), filed a lawsuit over alleged violations of Federal Securities Laws by Rite Aid Corporation.

Investors who purchased shares of Rite Aid Corporation (NYSE: RAD) have certain options and for certain investors are short and strict deadlines running. Deadline: December 19, 2022. NYSE: RAD investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

Philadelphia, PA based Rite Aid Corporation operates through two segments, Retail Pharmacy and Pharmacy Services. The Pharmacy Services segment provides integrated suite of pharmacy benefit management ("PBM") offerings through, inter alia, the Company's Elixir subsidiary, including technology solutions, mail delivery services, specialty pharmacy, network and rebate administration, claims adjudication, and pharmacy discount programs.
In Rite Aid's Q4 2022 earnings call on April 14, 2022, Rite Aid's President and CEO, Defendant Heyward Rutledge Donigan ("Donigan"), addressed the growth of Elixir's PBM services business during the selling season ending January 1, 2023, stating that (i) in the past few months, Elixir had already "sold 35,000 new members" (as against a total of 55,000 new members in the prior year), (ii) Elixir was a finalist for 150,000 additional new members, and "results have shown that once we get to finalist, we're winning deals 35% of the time," and (iii) Elixir had "a current pipeline of nearly 1 million members and growing."
In a letter to shareholders, dated June 10, 2022, appearing in Rite Aid's 2022 Notice of Annual Meeting of Stockholders and Proxy Statement, Defendant Donigan stated, "[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."
In Rite Aid's Q1 2023 earnings call on June 23, 2022, Defendant Donigan stated concerning the PBM services business that "[o]ur strong network contracts, new rebate capabilities, innovative clinical services and expertise in government programs have enabled us to add 80,000 new lives for January 1, 2023 start date. These are more new lives than we sold last year. And additionally, the selling season is still in progress, and we've got close to 1 million lives remaining in the pipeline for January 1, 2023." On the same call, Elixir's COO, Defendant Chris DuPaul, advised that "we've had a pretty strong start to our selling season, particularly on the health plan side," and "we're feeling really good about where our lives are headed going into [1/1/23]. . ."
On September 29, 2022, Rite Aid announced a $252.2 million charge for the impairment of goodwill related to the Company's 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 related to Elixir based on "an update to our estimate of lives for 2023 based on the latest selling season," and that Rite Aid "expected[ed] lives to go down."

Shares of Rite Aid Corporation (NYSE: RAD) declined from 11.38 per share on August 16, 2022, to as low as $4.12 per share on October 17, 2022.

The plaintiff claims that between April 14, 2022 and September 28, 2022, the Defendants made false and/or misleading statements and/or failed to disclose that despite representations to the contrary, the number of new members (i.e., "lives") that the Elixir PBM services business was adding during the selling season ending on January 1, 2023 was in material decline, that Rite Aid was likely to recognize a significant charge for the impairment of goodwill related to Elixir due to a decrease in "lives" covered by Elixir's PBM services business, and that as a result, the Company's public statements were materially false and misleading at all relevant times.

Those who purchased shares of Rite Aid Corporation (NYSE: RAD) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.