What happened

Shares of Rite Aid (NYSE:RAD) have given up 13% through the first half of 2018, according to data from S&P Global Market Intelligence, as the struggling drugstore chain seeks to complete a merger with Albertson's and sold nearly 2,000 stores to larger rival Walgreen Boots Alliance

Rite Aid's results have continued to disappoint as the company is barely profitable on a non-GAAP basis and same-store sales are declining. 

A wooden Rite Aid sign that reads Healthy isn't a goal. It's a way of living.

Image source: Rite Aid.

As the chart below shows, the stock started out the year on a strong note, but quickly gave up those gains, and sank recently on a weak earnings report and news of Amazon.com's acquisition of PillPack. 

RAD Chart

RAD data by YCharts.

So what 

Shares of Rite Aid got off to a solid start, rising 10% in January as the company appeared to make progress in its turnaround plan, sprucing up stores, adding new loyalty members, and benefiting from lower generic drug prices thanks to its agreement with Walgreen's. On Feb. 20, the stock surged with the announcement of a merger with Albertson's, a deal that looked like a win for Rite Aid as it would give investors an approximate 29% stake in the combined company with an enterprise value of $24 billion, which includes debt, compared to Rite Aid's stand-alone market value of $2.3 billion at the time. The deal would also allow Albertson's to return to the public markets.

However, the stock sold off following the announcement as some investors seemed to sour on the merger as some large investors believed they were getting shortchanged.  

After trading sideways for most of the spring, the stock jumped on June 22, when the company announced a vote on the Albertson's merger on Aug. 9. However, the stock gave up those gains as Amazon threw its hat into the prescription drug industry and the company turned a middling earnings report. 

Now what

With the Albertson's merger pending, Rite Aid shares will likely remain stuck in a no-man's-land. As consolidation and e-commerce pressure its retail and pharmacy operations, selling its business is likely the best way to go, but a deal that will appease both regulators and investors has been to difficult to come by.

Management continues to push for the Albertson's merger, sending shareholders a letter on July 10 urging their approval for the merger. In it, the company said, "Our work has led us to conclude that the merger with Albertsons is the best way to achieve our key strategic priorities of growing front-end sales, serving as a trusted advisor to our pharmacy customers, building a winning value proposition for payors and providers, and delivering compelling long-term value to our shareholders." 

Look for a big move one way or another from Rite Aid shares on Aug. 9. 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.