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Author Topic: Radio Shack Shares at $2. The Slide Continues  (Read 11608 times)
K0OD
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« on: October 07, 2012, 07:35:33 AM »

Astonishing to me that Radio Shack stock has fallen to $2 a share amid an extremely strong stock market. At that price, delisting from the NYSE may be near. The stock is heavily shorted. Its fat dividend has been suspended. The CEO is out. Market cap values its stores at just $40,000 each. Balance sheet condition isn't dire... yet. RSH shares reached nearly $80 12 years ago.

Note that Best Buy is also struggling. They blame web competition for their problems. 

Two year RSH stock chart. There have been almost no upticks in the past two years:
http://finance.yahoo.com/q/bc?s=RSH&t=2y&l=on&z=l&q=l&c=
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KG4NEL
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« Reply #1 on: October 07, 2012, 10:10:20 AM »

12 years is positively ancient for RS - think about all the things people use on a regular basis that simply didn't have any market penetration in 2000.
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WV9K
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« Reply #2 on: October 07, 2012, 02:08:23 PM »

From my ongoing experience with rat shack, this is in no way surprising.

No more parts worthy of mention and absolutely clueless (and often obnoxious) sales droids / policies almost exclusively.

Only one rat shack I will still patronize when desperate (and not uncommonly disappointed with out of stock).

They dumped (on) their customer base (which, granted, seems to be decreasing with the dumbing down of the youth).

Disappointing to see where they are ending up from where they once were.
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K0JEG
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« Reply #3 on: October 07, 2012, 04:35:33 PM »


Note that Best Buy is also struggling. They blame web competition for their problems. 

I bought a tablet at BB a few weeks ago. The price was within $10 of Amazon, and I could pick it up at the store same day. Sales tax did bump up the price (along with eating lunch out instead of at home), but it was a fairly good experience. They really need to promote this service (buy online, pickup at the store) if they want to survive. I'll bet most people don't even know it exists.
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KB4QAA
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« Reply #4 on: October 07, 2012, 05:39:16 PM »

Well of course this is the regularly scheduled Radio Shack bashing.  I don't mind observations of the market, but the regular shoveling of manure gets tiring.

For what it's worth, My local RS is still operated by the same friendly and knowledgeable manager (for at least 12 years), who has even hired a couple former military electronics techs to fill out his staff.

I continue to find most of the parts i need and am even surprised by new items appearing.  As RS promised a couple years ago, the parts shelves were thankfully upstocked and robotic, computer and electronics kits also showed up in time for last Christmas.

Radio Shack is taking a beating, in a consumer market and electronics hobbiest market that has changed dramatically in the last 45 years.   I hope they hang on, but they can't force people to buy things or force them to have certain hobbies.

b.
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K0OD
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« Reply #5 on: October 07, 2012, 08:39:22 PM »

Quote
Well of course this is the regularly scheduled Radio Shack bashing

My point is that if you extend that inexorably declining stock chart down to zero, there may be no Radio Shack to bash very, very soon.

Can RS's business model be scaled from its current 5,000 stores to, say, a survivable 1,000 or less? A problem is that the Shack is highly vertically integrated. Often what they sell, they also make. So as their storefront numbers dwindle, their wholesale costs rise. They can sprinke in brand name products but then their traditionally fat margins will go to hell.

The $2 stock price and heavy short interest indicate that Wall Street sees RSH as "Game Over"    
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KE4YOG
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« Reply #6 on: October 08, 2012, 05:17:40 AM »



My point is that if you extend that inexorably declining stock chart down to zero, there may be no Radio Shack to bash very, very soon.

Can RS's business model be scaled from its current 5,000 stores to, say, a survivable 1,000 or less? A problem is that the Shack is highly vertically integrated. Often what they sell, they also make. So as their storefront numbers dwindle, their wholesale costs rise. They can sprinke in brand name products but then their traditionally fat margins will go to hell.

The $2 stock price and heavy short interest indicate that Wall Street sees RSH as "Game Over"    
[/quote]


Since when does Radio Shack make most of what it sales? At least around 20 years ago Radio Shack made almost zero of what they sale. When Tandy computers manufacturing was sold Radio Shack had got out of what it did make. I am not bashing Radio Shack. Radio Shack was good to me for 3 years after I got out of college. I made fair money and enjoyed the work but I got tired of not being able to take time off during Oct-Dec. It really cut into my hunting time. Radio Shack has made some dumb choices as far as product mix, personell issues and other things. It is sad to see a company that Charles Tandy built to slowly wither. Mr. Tandy knew how to make a business profitable. He of course died way before I worked for them but the same principals he ran the company by were used until Len Roberts was hired as CEO. That was the beginning of a slide of bad choices that has put the corporation where it is today.
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K0PD
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« Reply #7 on: October 08, 2012, 11:38:33 AM »

The owner of the radio shack in my small city told me that radio shack is more concerned about selling phones annd they as dealers often lose money on the phone sales. There store is surviving because there more into stereos/music. There is one in the suburbs of larger city that seems to be doing quite well and has for years but there heavy into communications. I think radio shack the Corporation may fail but there are plenty of the store that will survive because they brought in business relevant to there area.
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KJ6ZOL
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« Reply #8 on: October 08, 2012, 12:05:09 PM »

The owner of the radio shack in my small city told me that radio shack is more concerned about selling phones annd they as dealers often lose money on the phone sales. There store is surviving because there more into stereos/music. There is one in the suburbs of larger city that seems to be doing quite well and has for years but there heavy into communications. I think radio shack the Corporation may fail but there are plenty of the store that will survive because they brought in business relevant to there area.

The RS in Roseville, CA, recently moved to a new location. They were located in a spacious store, with all sorts of neat stuff for sale, but that area of town is dying, so they moved out to East Roseville. Their new store mainly has phones, batteries, and a little bit of audio/video equipment and tiny sections for consumer electronics and soldering supplies. There's nothing worth going there for anymore. The RS's that make it after the corporation goes under will be either electronics hobbyist oriented or audio/video oriented. In California, Fry's Electronics has the hobby market tied up, and is making a big push into audio/video, which is not traditionally Fry's strong suit.
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NK7Z
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« Reply #9 on: October 08, 2012, 06:41:18 PM »

If I want a cell phone, I go to RS...  If I want parts, I go elsewhere...
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Thanks,
Dave
For reviews and setups see: http://www.nk7z.net
KA1BIN
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« Reply #10 on: October 08, 2012, 10:46:01 PM »

"Since when does Radio Shack make most of what it sales? At least around 20 years ago Radio Shack made almost zero of what they sale."

That was true in 1992, however, 30 years ago, in 1982. Radio Shack/Tandy Corp. made about 70% of EVERYTHING that you saw in the store.

The following is a pretty good history of Tandy manufacturing.....

In 1982, Tandy Corporation was one of the largest American Home consumer Electronics MANUFACTUERs in the US. They made A LOT of money from their 1977 introduction of Tandy Computers, a lot of money. Those early computers during the later 1970's and all through the 1980's were designed by Tandy Engineers and made in Tandy factories in the US and Mexico (just over the border from their Texas headquarters.)

If you were to walk into a Radio Shack Store in the 1980's here is what you would have found....

The fixtures in the store were made by Tandy Cabinets, they had a factory in South Carolina (I believe), later in the 1980's they bought O'Sullivan Furniture, that company had been in business for decades making "knock down" furniture like you would find in cheaper furniture stores like Sears.

When you looked at the pegboard wall that had those hundreds of audio patch cables and computer cables and rolls of antenna coax wire, they were made by Tandy Cable with a factory again in the South. When you looked at the big outdoor tv antennas, they too were made by Tandy.

When you looked at all those TV antenna amplifiers, and video switches, they were made by a company called Gavin Industries, Tandy bought this company in 1980, they had been around since the late 1950's, they were located in
Bridgewater, NJ. I was down there for 6 months around 1986 as a Tandy Engineer to help out on some new amplfier designs, I also as a Quality Control engineer designed the testing jigs that would be used in all the Tandy Warehouse's Quality Control departments.

When you looked at all those cordless telephones, they were made in a factory in the Phillipines- a jointly 50/50 owned factory with Uniden and Tandy. During the late 1980's, the Communist Guerrillas sometimes would shoot down onto the factory grounds. I'm glad that I never visited that factory.

This Tandy/Uniden factory also made most of the police scanners that Radio Shack sold.

In the late 1980's, Tandy along with Nokia open a factory, ownership was 50/50, this allowed Tandy the ability to manufacture some of the cellphones for sale by their stores.

When you looked at the Clock Radios, many were made in a Korean Factory owned by Tandy (Tandy Consumer Services) was the name of this factory. Before I left Tandy in 2001, I was a QC Engineer for this division.

When you looked in the store's back room and saw all those brown cardboard boxes with inventory that needed to be put out, the labels on those boxes said A&A International, this was the Trading Company that Tandy owned in Japan, that was responsible for buying and shipping any products that Radio Shack sold that WASN"T made by a Tandy factory.

When you made your purchase, the bag provided to you was printed by a Tandy Company. During the 1960's-1980's all those catalogs and mail fliers were printed on Tandy Presses.

When you looked at the Automotive Radio/Tape Deck Display Cabinet, the wiring harnesses and switching boxes were DESIGNED BY ME! in 1979 and built by Tandy cabinets.

As far as computers, all desktops were made by Tandy, the laptops were made by Sharp and a dozen other companies. In the early 1980's Tandy bought a PCB manufacturing factory, so they could increase the precision and output of good quality mulit-layer pcbs for their computers. They also bought GRID computer along with their factories in order to supply the Military with portable computers.
Tandy also at this time bought the manufactuer of some British computer maker so they could manufactuer computers for the European market. In 1983 or 1984,
Panasonic supplied computers to Eastern Airlines, Tandy made the computers and put the Panasonic nameplate on them.

Basically, when you walked into a Radio Shack store back then, 75% of what you saw was made by a Tandy-Owned factory.

Steve - KA1BIN
« Last Edit: October 08, 2012, 11:11:33 PM by KA1BIN » Logged
TANAKASAN
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« Reply #11 on: October 09, 2012, 10:09:44 AM »

"Tandy also at this time bought the manufactuer of some British computer maker so they could manufactuer computers for the European market. In 1983 or 1984".

British computer manufacturers always were very few and far between and I'm not sure which company you're talking about here. Sinclair was eventually bought by Amstrad, ICL was bought by Fujitsu and Ferranti just died after a business deal went bad. Only one of them is still going, Acorn Computers who made the BBC Micro eventually became ARM and now make RISC CPUs. Apart from the really small outfits like Jupiter and Grundy that's it.

I grew up with the birth of the British computer industry in the 1970's and 1980's and I don't remember any takeover by Tandy / Radio Shack.

Tanakasan
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KB4QAA
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« Reply #12 on: October 09, 2012, 03:23:24 PM »

As we discussed last year, Radio Shack sold their factory in China in attempt to streamline and outsource small parts production.

About the only area they haven't tried to penetrate is the school age robotics and  'maker' interests.
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KA1BIN
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« Reply #13 on: October 09, 2012, 06:54:52 PM »

"Tandy also at this time bought the manufactuer of some British computer maker so they could manufactuer computers for the European market. In 1983 or 1984".

British computer manufacturers always were very few and far between and I'm not sure which company you're talking about here. Sinclair was eventually bought by Amstrad, ICL was bought by Fujitsu and Ferranti just died after a business deal went bad. Only one of them is still going, Acorn Computers who made the BBC Micro eventually became ARM and now make RISC CPUs. Apart from the really small outfits like Jupiter and Grundy that's it.

I grew up with the birth of the British computer industry in the 1970's and 1980's and I don't remember any takeover by Tandy / Radio Shack.

Tanakasan


I'll take a look and see if I still have my yearly reports. They did buy a small British home computer firm that serviced primarily the home market. I can just about picture the ads that they ran in the British hobby magazines.

Steve
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AF7CS
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« Reply #14 on: October 10, 2012, 09:26:58 PM »

Wanted to purchase an audio connector from RS. Didn't need full metal connector. At $ 4.50 each, too expensive. Clerk showed me a plastic backshell connector in a package, $ 4.50 for 2. Departed store without connector, but with lots of disgust.
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