Amazon.com Inc (AMZN)

[Phaeton]

Mike I agree with you on RiteAid. The folks on that board don't get it. I posted this today on the RAD board.


4600 stores with good cash flow I would bet that several suitors are waiting. Maybe even Amazon who has made it known they want into the Pharma business.

Rite Aid has millions of customers already in their system and with established Insurance coverage being either private or Medicare / Medicaid. Having established insurance relationships and a very viable PBM set up.

Why would Amazon not want to buy Rite Aid? You tell me. They can fix the problems with the cash flow from operations. It would not be a money drain for Amazon. They could establish their Amazon Go stores in the Rite Aid stores in urban areas.

They currently have a relationship with drop boxes in either Walgreens or CVS with Federal express for packages. They can move that relationship to their Rite Aid stores.

No current conflict with FTC as Amazon is not in the Pharma business yet. Do you think they would have problems like Rite Aid has had at the FDA for this deal with Walgreens

What would the street reaction be to a Amazon deal with Rite Aid? Walgreens and CVS stock would drop 25%. Walmart would not be happy about the deal. It hurts Costco too.

Other buyers than Amazon? You bet. Perhaps Cerabus or Apollo management, KKR or perhaps even Kroger? Maybe even somebody from overseas.

Even Warren Buffet who has never purchased a distressed company might play with Rite Aid. It would be a cheap turn around opportunity.

We all go shopping at the pharmacy as they are like a mini market with things we need to buy conveniently.

Last point is why is it different today than 24 months ago when the original deal with WBA was put together. The answer is retail has changed. It's changed big with big disrupters like Amazon who will cream the crap out of the existing players in the Pharma space. The RISK/REWARD factor has changed and its makes Rite Aid a very attractive turn around target.