This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

RadioShack Must Adapt or Perish

It's nice to see a sense of urgency here, but many investors probably see this as "too much, too little, too late."

There's little doubt that the company will be closing some stores, and there's also the possibility of some asset sales. Both may be necessary if RadioShack hopes to survive.

In terms of resources, there's still $536 million in cash on the books, and $391 million remaining on a revolving credit agreement. Debt at $778 million is an issue, and a concern. The company's convertible notes, with principal of $287 million mature in August, and that will need to be addressed soon. The remaining debt matures in 2016 and later.

Taking into consideration RadioShack's latest balance sheet data, the company still trades at a relatively small multiple of net current asset value, at 1.08 times NCAV.

This is "owning ugly" at its finest. If the company can regroup, and emerge as a smaller, profitable entity, owning RadioShack here will be viewed in hindsight as a "deep value" play. If the downward spiral continues, it will be seen as a fool's errand.

I've been on both sides of that equation a time or two.

At the time of publication, Heller had was long RSH.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RSH $0.31 12.76%
TSLA $236.64 -3.90%
YHOO $30.89 0.13%
AAPL $111.09 0.28%
FB $92.66 -1.40%


Chart of I:DJI
DOW 16,782.31 +5.88 0.04%
S&P 500 1,978.13 -8.92 -0.45%
NASDAQ 4,731.0990 -50.1650 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs