Monday morning is a different story. Shares are down about 10% in the first hour or so of trading, very likely because reality has set it. A short-term fix to RadioShack’s financing is not going to fix any of the long-time problems the company has.
RadioShack has made huge losses for two years. The company’s plan to close 1,100 stores was blocked by investors, who allowed just 200 stores to be closed. Whatever the terms of the agreement with Standard General and the other new lenders, investors have by now figured out there is almost no chance that any holder of common stock will see a dime when the company files for bankruptcy.
ALSO READ: Can RadioShack Close 1,000 Stores?
Does RadioShack have a plan that will turn the company around in the fourth quarter? Even if it does, why would anyone think that it has a chance of working? It’s taken RadioShack years to get into this mess and it won’t get out in three months, even if the period is the biggest of the year for retail sales.
The company can’t close stores. The deal with hardware maker and accelerator PCH International that RadioShack signed in June was much too little and much too late. Even if it is successful, it won’t move the needle significantly on revenues or profits. At best the company will attract more of its loyal hobbyist customers.
Last month the CFO resigned after just seven months on the job and just one day after the company announced that unless it could find a rescuer it would have to file for bankruptcy.
RadioShack’s shares were trading down nearly 9.5% Monday, at $0.90 in a 52-week range of $0.55 to $3.88.
ALSO READ: 10 Brands That Will Disappear in 2015
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