At .86 a share it is a small risk
The smart money would take Berkshire Hathaway "A" shares at over $200,000 each to double before RSH sub-buck doubles. RadioShack might hang on in some form but RSH common shareholders are unlikely to. Yesterday's spike was because a hedge fund, that already lost heavily in RSH, announced they were working on a restructuring to avoid or delay bankruptcy. More time isn't what RadioShack needs. Our old Radio Shack is disappearing in any event: over half its sales come from cell phones.
Standard General LP, one of RadioShack Corp.’s largest shareholders, is negotiating a possible rescue package with investors intended to allow the retailer to stave off a bankruptcy filing, according to two people with knowledge of the talks.
The hedge fund that is also orchestrating a lifeline for American Apparel Inc. (APP) is seeking to bolster RadioShack’s cash through the issuance of debt or equity, said the people, who asked not to be named because the discussions are private. The firm is also working with RadioShack’s management to craft a plan that would avoid Chapter 11, the people said.
I wonder about the purpose of that heavily publicized move: Is it to benefit RadioShack shareholders or to give Standard General time to unwind their terrible investment?