Will the RiteAid Walgreens merger happen? Speculate and make BILLIONS!

in #stocks7 years ago (edited)

What the heck is the RiteAid Walgreens merger?

Let's catch you up to speed quickly here: Walgreens wants to buy RiteAid for $6.50 a share. They have been trying to get the deal done since 2015.

Now, the FTC has to make a decision on whether they will approve the deal by July 7 which is less than 10 business days away.

RiteAid-Walgreens.png

The Opportunity

RiteAid is trading at around $3.00 a share. That means, if this deal goes through, you're looking at a 116% return.

As Eminem said, if you had one shot, or one opportunity, would you take it, or let it slip?

eminem-one-shot.gif

The Risk

The FTC is concerned that this merger might result in reduced competition increasing drug prices. Obviously the risk is that the FTC will file a lawsuit to stop the merger. This has been sitting since 2015 which isn't a great sign, although the RiteAid CEO is apparently pretty committed to making this happen.

As I understand it, there are only 2 people who will determine whether the FTC will aim to stop the merger. One is a republican and one is a democrat. Both must agree to stop the merger or it will be allowed. That's not to say that it's impossible for them to agree, but in 2 out of 3 scenarios the merger happens (1) Both agree to stop merger - no merger (2) Both agree to the merger - merger happens (3) One wants the merger and one is against it - merger happens.

What % likelihood would you give this RiteAid Walgreens merger?

RiteAid.png

I give it a 50% chance of going through, while the options market is trading like there is about a 30% chance of this deal happening.

Disclaimer: This isn't investment advice by any means. Do your own diligence and determine your risk tolerance before determining whether you want to play $RAD. Personally, I have a high risk tolerance and I am in for this coin flip of a stock trade.

Put your thoughts in the comments. If you liked this post, please follow @SuperSkillz for more wacky stock trades.