I agree, RSH is a buy at these levels, just please stay off of margin!
Take a look at the Money Flow Index on either a 4-hour or daily basis. Values below 20 indicate an oversold condiation and on the 4-hour it is reading 4.29! The daily is a more reasonable 23.35, but that is still oversold territory.
I don't think RSH will have too much trouble managing the $375M debt restructuring (due August 2013), even though Fitch downgraded their default rating to CCC from B- back in July. I wonder if those behind the incredible short interest had any influence over Fitch's decision there. Nothing like trying to add fuel to a fire, even though RSH has $900M in liquidity available between cash and a credit line!
Suspending the dividend frees up $50M per year; that makes sense. Once that debt is paid down / restructured, I think RSH will be in a good position to right the ship long-term. The 3rd quarter may not be pretty on margins with the iPhone 4s blowouts, but I think most people understand that.
At this point, I really do not see enough meat left on this bone to justify a whopping 46% short interest. At prices below $3 I personally consider RSH a buy. At the current levels below $2.50, it is a strong buy.
Once that debt is restructured, and RSH can at least maintain profitability, I would be in favor of yet another share buyback program. Although, I think the announcement of just the debt restructuring would send shorts packing. A quarter or two of profit and a $50M share buyback program would send RSH above $10 pretty quickly, I imagine.
Disclosure: I began initiating a core position yesterday and my current average price is currently $2.47. I'm taking it slow and saving some dry powder. With such a large short interest, I could see one more short-term insane push downward. Loading up on shares below $2.25 would be nice.