See WSJ for full article this is excerpt
June 7, 1999
Major Business News
Rite Aid CEO,
Stakes in Leased Property,
By ROBERT BERNER
Staff Reporter of THE WALL
"Rite Aid Corp.'s chief
executive, Martin Grass, and some members of his family,
disposed of ownership stakes in property leased to Rite
Aid and in vendors that sell to the chain, the
company disclosed in its proxy
....Mr. Grass and the three executives, however, were
granted stock options that have an exercise price of
$30.75. Mr. Grass received options to buy one million
shares; Mr. Noonan, 650,000; Mr. Brown, 300,000; and Mr.
Bergonzi, 300,000....Half the executives' options vest on
Oct. 12, 2000, and the remainder on Oct. 12, 2002. But
if Rite Aid's stock trades for one consecutive
calendar month at a price of at least $60 per share prior
to Oct. 12, 2000, all the options will vest by the
You have just described every retail job in the
world. The mgmt for any retail chain always has and
always will give a damn about its employees.
mom has worked for many different retail companies
all her life and has been at RAD for over 5 years.
According to her no matter who you work for you have to
deal with it. Its the nature of the beast.
You are right on about RAD. I currently work for
them, but I am going to change jobs and take pretty
large pay cut to do so. I have worked for these idiots
for almost 3 years, and all the rumors I heard before
I came to work for them are true (if not
understated). The management has no concern for its employees
and at times it would appear less for the customers.
I think that if the choice were to present itself
later on between Rite Aid and Mcdonald's... it would be
It is a company selling online. Look at others...
they can do well without turning a profit, stockwise.
That is one thing that makes this good for RAD. If RAD
gets into trouble, they can sell their stake in
drugstore.com (hopefully) at a substancial profit. Seems to me
Martin made a good deal here, although I do figure RAD
will take a hit unless it is profitable, which I
doubt. It does have the best site. Drugstore.com. Real
simple. Walgreens.com is another one that is well known.
Soma.com??? What the heck. Planetrx.com??? Huh??? CVS.com,
farmiliar to those on the east coast/south/parts of
Also, this name. My storewanderer account
appears to have been deactivated. They say I violated
terms of service. Luckily, I have this account also.
One of RAD's competitors, CVS, reports 2Q
earnings on Wednesday of this week. The earnings from a
year ago were 0.32, and the consensus estimate for
this year is 0.38. It will be interesting to see if
the whole sector is rewarded or punished based on
Based on the PE ratios shown at
the Money website (i.e., 15 for RAD, 30 for CVS, and
45 for WAG), RAD's stock price would have to double
or triple to close the gap with the other industry
leaders. Time will tell...
Online pharmacy drugstore.com inc. is another
deal that is expected to generate strong interest with
its offering of 5 million shares in a range of $9 to
``Drugstore.com is going to go through the roof. They are doing
something we will see more and more of and that is getting
investors and strategic relationships,'' Taulli said,
drugstore.com's relationships with General Nutrition Cos. Inc.
(Nasdaq:GNCI - news) and Rite
Aid Corp.(NYSE:RAD -
click on address for story
Money magazine has an interesting article in its
August 1999 issue entitled, "Lessons from the Master."
The article discusses John Neff's approach to stock
selection. (For those who don't know Neff, he is one of the
greatest value investors of all time who was at the helm
of Vanguard's Windsor fund during its glory years.)
If you visit the Money web site
you can input stock symbols, and it will calculate
Neff's total-return ratio for that stock.
suprisingly, when you enter RAD, CVS and WAG, you get Neff
ratios of 1.4, 0.6, and 0.4, respectively. Neff
typically looks for ratios of at least 2 (the higher the
number, the more undervalued the stock); however, with
the S&P's ratio being 0.3, he considers stocks having
values greater than 0.6.
RAD held up very well
during a very challenging week, so it will be
interesting to see how it (and the overall market) fare this