You need gut!

I’m quite busy at the moment so I will be brief. Probably you can just ignore what I’m going to say below as most of you won’t dare to touch this one at all anyway. After all, this is not something I will talk to my wife. But for a few risk takers with a strong heart, this may be an interesting idea. It is truly a crisis investing speculation!

I’m talking about the troubled pharmacy chain retailer, Rite Aid (RAD). As I have alluded to, this is one of the most poorly managed companies publically traded and it deserves to be punished for the past two decades! Even at a price down to $0.55 per share, yes below $1, it dropped another 10% after its poor earnings and guidance reported yesterday. There is a true risk of bankruptcy for RAD, to be honest with you. But here is the thing, great money is often made from those with the extreme risk that turn the tidal wave around to become a little bit better. I see RAD has this kind of potential. For two reasons:

• RAD controls more than 2500 stores nationwide, which is a great asset for it. This could potentially be something attracting those with a deep pocket who are looking for such retailer stores.
• Although heavily debted with a huge negative cash flow, it is still generating $22 billion revenue annually.  The biggest problem for RAD has been its poor management but this may be changing. As reported, Rite Aid has eradicated its top executives and 400 managers in a recent shakeup. Whether or not it will help to turn it around is a big question mark but I think there is a good chance we may start to see some drastic changes benefiting the company. If so, this company in the deep crisis may see a light at the end of the tunnel, which could drive some real money to pour in. The stock has a 15% of short interest, which could easily trigger a gigantic short squeeze if even tiny bit good news started to flow in.

But again, this is a real risky speculation with a real chance of losing all the money put into this stock. Don’t touch it if you cannot sleep for the money held with it as you may never see your money again! Hope I have given you enough warning!!