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Walgreens Boots Alliance (WBA) is tumbling 11% in early trading. The sharp downturn comes after the company announced yesterday that it was "suspending" its dividend.
WBA's Dividend Halt
WBA disclosed yesterday after the market closed that it would stop paying its quarterly cash dividend. The company has provided a dividend for over 90 years. In 2024, the troubled retailer cut its dividend by almost 50%. Its dividend yield as of yesterday was listed at a huge 10.85%.
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WBA said that the elimination of the payout "is aimed at strengthening WBA’s balance sheet by reducing debt over time and improving free cash flow."
As of the end of last year, WBA had $33.85 billion of total debt and just $3.11 billion of total cash.
WBA's Other, Recent Woes
On Jan. 27, CNBC reported that a potential acquisition of WBA by private equity firm Sycamore Partners was "mostly dead."
On Jan. 17, the U.S. Justice Department sued the drug store chain, alleging that it had filled likely illegal prescriptions for controlled substances, including for unsafe amounts of opioids. These prescriptions probably violated the law because WBA failed to verify if they were valid, DOJ wrote. WBA also acted contrary to the law by seeking reimbursement for illegal prescriptions, the Justice Department charged.
Walgreens denied the allegations.
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Disclosure: None. This article is originally published at Insider Monkey.