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RadioShack Corporation (NYSE:RSH) May Lack Power To Recharge Its Business

Boston, MA 09/24/2014 (wallstreetpr) – Recently RadioShack Corporation (NYSE:RSH) launched its in-house mobile repairing service, which initially looked very promising, but things changed over time. It is quite active in offering in-house solutions for batteries or other parts of tablets and mobile phones. The biggest problem for the company is not the efficacy of workers, but the cash crunch. In an era where anything can be ordered online via e-commerce giants like eBay, Amazon etc., the scope for RSH is very limited. It may become bankrupt soon, if things don’t improve in near future.

Management Call:

The management of the company said that it tried to convince one of its vendors to change the terms and modify them for the growth of the organization, but it failed to do so. Customers have lost their trust in RadioShack Corporation (NYSE:RSH), and they are wondering as how long would the company survive in such toilsome condition. One of the spokesmen of the company said that RSH was still trying to figure out things with its vendor, but there was not much hope left for any turnaround in the near future. The announcement was made on the occasion of a regulatory filing.

A few days back RSH disclosed that its cash reserves had fallen drastically over the last few months. It requested one of its major vendors to modify various terms that were hurting RadioShack Corporation (NYSE:RSH)’s offerings, but it failed to do so. Had the discussion would have executed successfully, the company could save itself from going bankrupt, but all the efforts failed eventually. According to Joe Magnacca, Chief Executive Officer of RSH, the company had $30 million cash left in reserve account and could borrow another $152 million with the help of an extended credit facility. An analyst with UBS named Michael Lasser said that creditors were putting extra pressure on the company for repaying their amount. If the company wants to execute any strategic turn around, then it would need financing in the near future, which seems difficult as of now.

Published by Pamela Garcia

Pamela Garcia is a keen follower of U.S. stock market



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