RadioShack Rumors Continue, Misplaced Optimism for a Broken Brand?

This is a company which was going to be sold in a private equity buyout or in a turnaround retailer strategy. The problem is that RadioShack is one of those brands that nobody really wants and nobody is excited about. It just could not find a buyer, or at least not a buyer at the prevailing stock market share prices of the time.

To prove just how terminal this situation is, RadioShack’s short interest has remained up around 35 million shares. This is lower than it was a year ago when there were well over 40 million share short. Still, this is over one-third of its shares in the float that are considered to be “Short.” The options trading has been much more active in the call options today, but prior to this the options open interest in the active puts has exceeded the open interest in the active calls for the months of July, August, and October.

Whatever rumor mongering is happening in RadioShack just seems almost more fiction than fact. We always admit that anything is possible, but ask yourself this question: “If you were the greatest retailing and branding manager in the world, how easy would it be to turn RadioShack back into a brand that is loved again?”

Again, anything is possible. Maybe the logic is that if a bottom-fishing turnaround buyer did not love a RadioShack buyout at $15, nor at $10, then maybe they will get really excited down at $2 or $3 per share.

RadioShack shares are up 5.5% at $3.08 but we would caution that the trading volume is still fairly low at about 2.6 million shares as of 12:25 PM EST.