Quantcast
Get breaking news alerts via email

Click here to manage your alerts
A first — RadioShack slips to below $1 per share
Retail technology » Company’s stock traded for as much as $80 in December, 1999.
First Published Jun 20 2014 12:24 pm • Last Updated Jun 20 2014 03:04 pm

New York • RadioShack’s stock closed below $1 per share Friday for the first time in its history, reflecting investors’ concern over what lies in store for the long-struggling consumer electronics chain.

Shares of RadioShack Corp. fell 11 cents, or 10 percent, to close at 92 cents. The New York Stock Exchange could delist the stock if it closes below $1 per share for 30 consecutive trading days.

Join the Discussion
Post a Comment

The stock is well below its all-time high of $79.50, set in December 1999. The shares’ sharp dive since then comes as RadioShack struggles to find its place in the evolving retail and technology landscape.

If shares remain below $1 and are delisted, that doesn’t automatically mean RadioShack faces immediate death. Its stock could still be traded in the over-the-counter market.

But analysts say that a bankruptcy proceeding is likely for the company.

"There’s no chance that this stays outside of a restructuring," said David Tawil, co-founder and portfolio manager of Maglan Capital, which follows distressed companies. He believes a formal liquidation is more likely. He added, "I don’t think anybody will miss RadioShack if it goes out of business."

RadioShack did not immediately respond to an email from The Associated Press.

Long known as a destination for batteries and obscure electronic parts, RadioShack has sought to remake itself as a specialist in wireless devices and accessories. But growth in the wireless business is slowing, as more people have smartphones and see fewer reasons to upgrade.

RadioShack’s turnaround efforts have included cutting costs, renovating and closing stores, and shuffling management. The Fort Worth, Texas-based company is attempting to update its image and remain competitive against online and discount retailers. It is working on adding new products, including private-brand and exclusive items such as those from new partnerships.

It hasn’t helped stem the tide, and investors remain skittish. The stock is down 65 percent this year.


story continues below
story continues below

Earlier this month the chain reported that its first-quarter loss widened and revenue declined, hurt by softness in its mobile business and consumer electronics.

RadioShack has limited options to stem its sales declines given a tightening cash situation, according to Fitch Ratings. In a recent report, Fitch said that it expects negative free cash flow of $200 million to $250 million in 2014. That, together with the $100 million to $150 million it plans to spend on seasonal inventory, would "substantially eat into the company’s total liquidity of $424 million as of May 13," according to Fitch.

"They’re consuming a lot of cash in the core business, and that’s not sustainable," said Philip Zahn, senior director at Fitch. "The clock is ticking."



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.