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.

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?

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?

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.