On the mildly positive side, the company has been opening newly designed "concept" stores and has continued to shake up management, the latest move the hiring of a new chief financial officer, John Feray, who was formerly senior vice president of finance and strategy for Dollar General (DG).
Last month, RadioShack signed a new five-year financing agreement, totaling $835 million, which should put any current liquidity concerns to bed, at least for now. Of course, the downside here is that the financing did increase borrowing costs.
The stock got a nice boost last week, rising 18% on Wednesday, after it was disclosed that Jamie Zimmerman's Litespeed Management had taken an 8.1% stake in the company. It's a positive to see a hedge fund take such a sizable stake at this point when most investors have given up.
That certainly doesn't guarantee success; it just means that there's another fool or genius out there, a fund manager who is willing to make a sizable investment in a distressed entity, which gives some comfort that you are not the only one who sees value. RSH data by YCharts
Of course, these situations are fraught with risk; bankruptcy is a possibility, and any positions taken by investors should be relatively small.
We'll see in time whether RadioShack was indeed a value trap and end up at the place where past-their-prime electronics retailers go to die, or whether a renewed, scaled-back and mildly profitable entity will emerge.
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