NEW YORK (TheStreet) -- With great fanfare and at great cost, RadioShack (RSH) recently let the world know through Super Bowl advertising that it would be remodeling its stores in an effort to boost sales.On Jan. 25, 2012, Ron Johnson, then-chief executive officer of J.C. Penney ( JCP), announced the retailer would be reconfiguring its stores to boost sales. On that day, the stock closed at $34.27. There was great hope this would work as Johnson had headed up the retail operations of Apple ( AAPL).
The results to date: Johnson was fired last April, he was then selected as the one of the worst chief executive officers of 2013 by Professor Sydney Finkelstein of Dartmouth, and the stock of J.C. Penney is now trading around $6.15 a share with a short float of close to 40% (5% is considered to be troubling).
Don't expect any different results than those from J.C. Penney. Just like J.C. Penney, there has been an increase afterwards in RadioShack's stock price. There are many reasons to use this rise to sell if long on RadioShack and short, if possible (there is already a short float of more than 40% for RadioShack, so good luck borrowing some shares to short).
In May 2007, RadioShack was trading around $35.00 a share.
Now it is about $2.65 (after the recent rise). There have been no shortage of attempts to turn around the beleaguered consumer electronics retailer. Over the last two years, there has been an emphasis on smart phones to improve earnings.According to Finviz, earnings-per-share growth is off by 22.90% over the past five years. This year, earnings-per-share growth is down in the triple digits. The return-on-equity for RadioShack is a negative 52.80%, so clearly the smart phone strategy did not work.