After posting declining sales for past several quarters, it looks like the once go-to-shop for electronics, RadioShack Corporation (NYSE:RSH), is nearing its end. According to the recent reports, the electronics chain is likely to shut down its stores and hand over nearly half of its retail stores to the third largest telecom carrier of the United States, Sprint Corp (NYSE:S).
According to reports from Bloomberg, the two companies were in discussions to co-brand the retail chain, although there is a possibility of a third bidder entering the deal and carry on the regular operations of the electronics store. Another report from the Wall Street Journal indicated that Standard General might serve as one of the lead bidder in a bankruptcy auction.
RadioShack Corporation (NYSE:RSH) gave a hint of bankruptcy in September last year in case the restructuring of the retailer failed. In October 2014, the electronics retailer said that it would try to convert a $120 million loan given by its investors in equity. However, nothing has worked so far for the company.
In a recent development at NYSE, the exchange has announced that it will initiate immediate delisting of the stocks of RadioShack Corporation (NYSE:RSH). NYSE sends out notification when a company fails to maintain the $50 million market cap for more than 30 days consecutively. The exchange gave RadioShack 45 days to come up with a plan and this was the second notice for the electronics retailer in the last one year.
In case the deal with Sprint Corp (NYSE:S) materializes in near future, these stores would operate under the brand name of Sprint only and RadioShack brand would seize to exist.
The shares of RadioShack Corporation (NYSE:RSH) declined in excess of 13 percent post the announcement and are currently trading at $0.240. Sprint (NYSE:S) is trading at $4.27 with slight decline in prices in the last trading session.
This article has been written by Prakash Pandey.