What Happened?

Shares of pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA) jumped 8.1% in the afternoon session after The Wall Street Journal reported the company was close to sealing a deal with private equity firm Sycamore Partners to go private. According to sources, the deal valued WBA at $10 billion.

The shares closed the day at $10.83, up 5.6% from previous close.

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What The Market Is Telling Us

Walgreens’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 14 days ago when the stock gained 13.5% after CNBC's David Faber said that a potential deal between the company (Walgreens) and private equity firm Sycamore Partners "was showing signs of life." The stock's reaction lifted investors' optimism as markets continued to digest the long-term implications of its recent dividend suspension (first time in over 90 years) and lawsuit with the Department of Justice.

Walgreens is up 18.4% since the beginning of the year, but at $10.88 per share, it is still trading 49.8% below its 52-week high of $21.69 from March 2024. Investors who bought $1,000 worth of Walgreens’s shares 5 years ago would now be looking at an investment worth $223.45.

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