The week has been nice to RadioShack Corporation (NYSE:RSH) shares. The corporation’s shares have more than doubled and there are indications that the company might be headed for cash infusion. This comes after registering a bad quarter back in June and has since seen its stock rise above the dollar.
Courtesy of this dim prospect, many day traders sought to capitalize on possible RadioShack Corporation (NYSE:RSH) demise to juggle with shares hoping of quick financial kills. The corporation’s stocks have risen to extremely high levels, jumping to a high $1.77 last Friday from 68 cents barely 7 days earlier.
The rate at which the corporation’s shares has been changing hand has been very high with Thursday alone accounting for a staggering 50 million of them. According to the Wall Street Journal’s recent post, FactSet rated the Thursday’s activity as the highest one-day financial activity realized by RadioShack Corporation (NYSE:RSH) since November, 1984.
Such activity has been associated with the fact that the corporation’s stock has a potential of skyrocketing to lucrative levels in the near future.
“You have a lot of retail guys looking at a low-priced stock like this and thinking ‘why not take a flier,’” said Sahak Manuelian, managing director at Los Angeles brokerage Wedbush Securities Inc.. “People love being all over a cheap stock that has momentum building upon itself.”
According to someone privy to the goings-on in the company, hedge fund Standard General is speculating offering financial bail out to get the institution back to its feet. Standard General owns up to 10% of the company and is therefore a potential beneficiary of an improved performance of the corporation’s stock.
Nonetheless, many analysts have downplayed the company’s possible resurgence. To make matters worse, The New York Stock Exchange had earlier given a stern warning to RadioShack Corporation (NYSE:RSH), citing a possible delisting due to the company’s poor performance. In the month that the warning was issued, RadioShack stock traded below $1 for thirty successive days.
Regardless, many optimistic traders invested in the stocks with the confidence that the stock will jump back up to trade at even higher figures.
This article has been written by Victor Ochieng.