RAD - Wall Street Breakfast Podcast: Rite Aid Dips On Bankruptcy Report

2023-07-11 06:41:21 ET

Summary

• Rite Aid's shares fell amid reports that the company is considering a Chapter 11 filing to address liabilities related to its opioid exposure; a bankruptcy filing is not confirmed or imminent.
• Berkshire Hathaway Energy is set to buy Dominion Energy's 50% stake in a Maryland facility for $3.3B, giving it control of one of seven US facilities that can export liquefied natural gas.
• Iovance Biotherapeutics announced an underwritten public offering of 20 million shares at $7.50 per share, with proceeds to be used for various purposes including launching an advanced.

Listen below or on the go on Apple Podcasts and Spotify

Rite Aid (RAD) dips amid report it's considering bankruptcy to address opioid liabilities (00:28). Berkshire Hathaway (BRK.A) (BRK.B) to buy Dominion's (D) 50% stake in Cove Point LNG in $3.3B deal (01:54). Iovance Biotherapeutics (IOVA) dips on pricing $150M offering .(02:49)

This is an abridged transcript of the podcast.

Rite Aid ( RAD ) ticked lower by 3% in regular trading on Monday and 2.5% postmarket Monday amid a report that the drugstore chain is considering a Chapter 11 filing to address liabilities related to its opioid exposure.

According to a Reorg report and a tweet from the reporter on the story, which cited unidentified sources, a bankruptcy filing hasn't been decided and isn't imminent.

Before that tweet was sent Monday at 4:10pm WYCO Researcher on Seeking Alpha published an article before 9am entitled, “Rite Aid May Be Forced Into Ch.11 Bankruptcy To Resolve Opioid Liabilities.”

Rite Aid (NYSE: RAD ) didn't immediately respond to Reorg and Seeking Alpha requests for comment.

The report comes after Bloomberg said last month that a group of secured bondholders was working with advisors ahead of possible talks with the drugstore chain to rework its debt.

Some investors are evaluating plans to provide cash to Rite Aid ( RAD ) as part of a so-called "liability management deal."

The deal would aid the company in paying what it owes as it deals with its $2.9 billion in debt, some of which is due in 2025 and 2026.

Rite Aid's CFO said late last month on the company's Q1 earnings calls that the company has an open dialogue with its lenders and is continuing to evaluate several options for addressing its 2025 debt maturities.

Berkshire Hathaway Energy (NYSE: BRK.A ) (NYSE: BRK.B ) said Monday it agreed to acquire Dominion Energy's (NYSE: D ) 50% stake in the Cove Point LNG plant in Maryland in a deal valued at $3.3B.

Berkshire Hathaway Energy ( BRK.A ) ( BRK.B ), which currently operates the facility and owns a 25% limited partner interest in Cove Point LNG, will own a 75% stake after the deal closes, with Brookfield Infrastructure Partners ( BIP ) holding the remaining 25% interest.

The deal will give Berkshire ( BRK.A ) ( BRK.B ) control of one of just seven facilities currently operating in the U.S. that can export liquefied natural gas.

Dominion ( D ) said Cove Point LNG was a non-core holding and it expects to use total after-tax proceeds of ~$3.3B to repay debt including the existing $2.3B term loan secured by its non-controlling interest in Cove Point.

Iovance Biotherapeutics (NASDAQ: IOVA ) announced on Monday the pricing of an underwritten public offering of 20 million shares of its common stock at $7.50 per share.

Premarket IOVA is down more than 10%.

Gross proceeds from the offering are expected to be approximately $150 million .

The offering is expected to close on or about July 13, 2023, subject to customary closing conditions.

Iovance intends to use the proceeds from this offering for several purposes, including to fund the commercial launch of an advanced melanoma therapy and to prepare its manufacturing facility in Philadelphia, and for other general corporate purposes.

Other headlines to look out for on Seeking Alpha:

Apple launches online store on Chinese social media platform WeChat - report

Meta's Threads may bring 5% revenue upside as it grows to Twitter size: Evercore

BP reaches $10.75M settlement in U.S. gas market manipulation case

Payoneer Global plans to lay off 9% of headcount

Fortinet, Check Point, CrowdStrike have 'favorable setups' going into Q2: MS

DraftKings jumps to new 52-week high with investors confident on the profitability timeline

On our catalyst watch for the day, Amazon's ( AMZN ) Prime Day event will run for 45 hours alongside dueling shopping promotions from retailers such as Walmart ( WMT ), Target ( TGT ), Newegg Commerce ( NEGG ), Overstock.com ( OSTK ), Macy's ( M ), and Best Buy ( BBY ).

And REGENXBIO ( RGNX ) will host a virtual investor day. During the event, members of REGENXBIO's management team and external experts will provide an update to the investment community on the company's pipeline.

They’ll focus on programs with expected interim clinical trial data to be presented in the second half of 2023. Shares of RGNX have rallied after similar events in the past.

U.S. stocks on Monday struggled for direction before eventually finishing in positive territory snapping a 3-session losing streak.

The Nasdaq ( COMP.IND ) ended up 0.18%. The S&P 500 ( SP500 ) added 0.24%, while the Dow ( DJI ) advanced 0.62%.

Of the 11 S&P sectors, seven ended trading in the green, led by Industrials and Health Care. Communication Services and Utilities topped the losers.

Treasury yields were lower. The 10-year yield ( US10Y ) was down 4 basis points to 4.01% while the 2-year yield ( US2Y ) was down 6 basis points to 4.87%.

San Francisco Fed President Mary Daly at an event on Monday said that a couple more rate hikes would be needed by the end of the year. Daly is among a number of Fed speakers scheduled to make comments this week.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are pointing higher. The Dow is up 0.1%, the S&P 500 is up 0.2% and the Nasdaq is up 0.3%. Crude oil is up 0.6% at more than $73 a barrel. Bitcoin is up 0.9%.

In the world markets, the FTSE 100 is down 0.1% and the DAX is up 0.4%.

For further details see: