NEW YORK ( TheStreet) -- Depending on which analyst one talks to, RadioShack (RSH) can either still survive in some form despite its escalating woes, or it's as good as dead already. And whether it does or doesn't survive, it might make sense for Sprint (S) to buy some of its stores -- but definitely not Amazon.com (AMZN) , analysts said Tuesday.
Trading RadioShack shares is being suspended on the NYSE amid reports that the ailing retailer defaulted on a loan. RadioShack said last month it received a continued listing standards notice from the NYSE because the average market capitalization of the company was less than $50 million over a period of 30 straight trading days and stockholders' equity in RadioShack was below $50 million.
"They're as dead as a doornail. They're done," Anthony Chukumba, an analyst at BB&T Capital Markets, a division of BB&T (BBT) , said in a phone interview Tuesday. He was just waiting for RadioShack to issue a press release to say as much, he said. "It's all over but the crying," he said, adding he had already dropped coverage on the retailer and had no doubt the retailer had indeed defaulted. RadioShack said in a regulatory filing Monday it had received a second default notice from Salus Capital Partners LLC, the administrator for the retailer's $250 million term loan facility. But RadioShack didn't confirm that it indeed defaulted and declined to comment on that Tuesday.
Wedbush Securities analyst Michael Pachter wasn't quite go gloomy. "They can survive if they are allowed to close stores and shrink their overall capital requirements," he said by email. "But their equity would be wiped out first via bankruptcy, since they can't get out of leases without filing," he said.
Amazon and Sprint may both be considering the purchase of some RadioShack stores, and Brookstone has also been mentioned as a potential buyer of stores. Sprint declined to say Tuesday whether it's indeed planning to buy any RadioShack stores, and Amazon and Brookstone didn't immediately respond to requests for comment.
Wedbush's Pachter said it doesn't make sense for other retailers to buy any of RadioShack's stores. "They are largely in poor locations and have to be completely re-formatted in order to be converted to Sprint/Amazon/Brookstone stores. I'm not sure why anyone needs to buy RadioShack stores in order to expand, but I suppose that [RadioShack] might have some below-market leases," he said.
BB&T's Chukumba agreed that it wouldn't make sense for Amazon to buy any RadioShack stores. The one building that Amazon opened in Manhattan is more of a distribution center that can be used to fulfill one-hour deliveries there than a store, he said. "Amazon's been fighting like tooth-and-nail, state by state, to avoid having to pay state sales tax," he said. If Amazon buys some RadioShack stores in a state that it doesn't already pay state sales tax in, that nexus (physical presence) will automatically require it to pay sales tax there, he said. Buying a bunch of stores would also run counter to Amazon's entire business philosophy of not needing any retail stores, he said.
Chukumba doubted that Brookstone would buy any RadioShack stores because of that retailer's own issues, he said. Brookstone filed for Chapter 11 bankruptcy protection last year. Chinese investment firm Sailing Capital and Chinese conglomerate Sanpower went on to buy Brookstone for more than $173 million.
But Sprint buying select RadioShack stores might be a good move, said Chukumba. Sprint, AT&T (T) , T-Mobile (TMUS) and Verizon (VZ) are all in a market share war. "If you can buy a bunch of RadioShack stores and immediately significantly increase your retail presence, I think that that makes sense," he said.
"The other retailer it may make some sense for is GameStop (GME) " -- not for GameStop-branded stores, but for its expanding Spring Mobile or Cricket wireless locations, said Chukumba. "I think that they would definitely have interest in selected RadioShack locations," he said. "Nobody wants all 4,000 or whatever RadioShack stores."
GameStop didn't immediately comment. Investors should bear in mind that BB&T disclosed that an affiliate received compensation from GameStop for products or services other than investment banking services in the past 12 months, and that BB&T expects to receive or intends to seek compensation for investment banking services from GameStop in the next three months.
TheStreet Ratings team rates RADIOSHACK CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate RADIOSHACK CORP (RSH) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."
You can view the full analysis from the report here: RSH Ratings Report
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.