RadioShack Corporation (RSH) Says It’s Running Out of Cash

RadioShack Corporation (NYSE:RSH) has had bad run in the market for the past few years. The electronic company has had its sales going down and cash racing out fast. On Thursday, the company said that its sales, after a whole year of activity, were down 20%, forcing it to think of new ways of acquiring funds and debt restructuring.

Some other strategies announced Thursday include cutting down on costs and focusing on stores that are better placed to bring in more revenue. And the idea of the company selling out too isn’t farfetched.

About 4 years ago, RadioShack Corporation (NYSE:RSH) tried to rebrand in a bid to lure more customers and to have its then customer base stick around. The company came up with the brand name “The Shark” and focused more on smartphones. However, things didn’t turn out as expected as the sector brought in many players and competition got even harder.

RadioShack Corporation (RSH)

The company, which has 4,485 stores, was left with only $30.5 million in cash in its last report. This translates to a meager $6,800 in average for every store. Moreover, the company’s filing with Securities and Exchange Commission in the last quarter sounded a red warning that the company might not hold longer as a going concern, a prospect that might see it sold out.

RadioShack Corporation (NYSE:RSH) lacks the confidence of investors in its current state. In fact, there are some investors who would vouch for keeping the inventory safe in readiness for an imminent sell-off.

Whether rebranding will give RadioShack Corporation (NYSE:RSH) a lifeline is a matter of speculation. Some of the elements that the company would like to bring in such as offering device testing have been around with some of its competitors, making such a move a fuzzy effort towards a bleak future. The company has faced a steady decline in its stocks over the past decade, going as low as 96%. Financial reports reveal that the stock went down to sell as low as 55 cents in August.

The company however believes that its efforts to rebrand, make financial adjustments, and provide better user experiences in its stores will give them a boost. Even though this is readily doubtable, time will tell.

Related Articles:

“RadioShack Corporation (RSH) to Get New Loan from UBS AG and Standard General LP”

“RadioShack Corporation (RSH) Headed for Possible Cash Infusion”

Related posts


Warren Buffett's Best Picks

Warren Buffett's these stock picks will crush the market over the next 12 months. Get our report FREE by becoming a member now