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RadioShack AO Message Board

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    • The article says that RSH will be taken over, perhaps by Best Buy, and the RSH name and brand will disappear.

      While RSH's normal "security analyst" ratios are reasonable (price/earnings; price sales; inventory turn; etc.), I don't see where it offers much either for a competitor or for an investment group.

      I view the company's strategy as selling to impulse buyers and others who need or want something right now; available nearby; from a brand store they know; and are who willing to pay significantly more than others charge for that privilege.

      I don't see this integrating with any other retailer, especially if they are going to lose the brand.

      If Best Buy wants a bunch of small shopping center stores, they can probably open them more cheaply than by taking over RSH and without whatever poor locations that are inevitably in the RSH list of stores.

      For the hedge/fund - leverage buyout investor -- RSH offers a balance sheet with debt and lease obligations making it more difficult to buy the company with its own money.

      I understand that RSH is trying to clean up its act to get taken over; I have my doubts if this will really work.

      Just my opinion.

      • 2 Replies to still_my_dime
      • Best Buy has no way of replicating the exponential boost to revenues and earnings that acquiring Radio Shack would provide. It is not a function of simply opening stores next door to Radio Shack.
        First, BBY would have to compete head on with RSH for the same customer, eroding sales and earnings.
        Second, BBY has no chance of securing leases in almost 5000 of the malls where RSH operates.
        Third, geeky or not, millions of people still choose to shop at the Shack. These customers would become BBY customers, giving BBY the critical mass to compete with WMT.
        Finally, RSH generates tons of free cash flow, and with almost a billion dollars of cash on the books, it makes an acquisition accretive to earnings almost immediately.

      • Your assumptions are right. Radioshack is just a house of cards.
        Does anyone know what type of golden parachutes are in place for Day, Beven and the boys in the event of a sale?