Heavy Shortselling In RadioShack Corporation (NYSE:RSH)

Posted by Lynn Eisler January 8, 2014 0 Comment 1635 views

Investors in the stock of electronic consumer goods retailer RadioShack Corporation (NYSE:RSH) bid a hasty exit yesterday, resulting in a 6.23 percent dip from its January 6 close price. The firm which operates close to 4300 stores in addition to 1000 dealer outlets has a market cap of $241 million.

Wall Street Journal Red Flags Rising Short Sell Deals

The selloff in the stock of RadioShack Corporation (NYSE:RSH) has been ascribed to a damning report in The Wall Street Journal, trade magazine yesterday. This report had highlighted that increased “short term” investment activity among the investor community with respect to the stock of this electronics store. The report goes on to predict that the investors in the company stock are in for a rough ride, in the event of not so impressive sales number announcements from the retailer for the just concluded holiday season.

Analysts Concur

Analysts over the past few months have been having a long and a very hard look at the finances and the broader financial health of this retailer. In the trailing 12 months, the retailer has managed to post sales of $3.8 billion and accumulated net loss of $263 million. Its sales for the quarter ending September had dropped by close to 10 percent and earnings per share had gone down by 258 percent in comparison to same quarter of FY12.

Tough Times

Due the continued weakness that RadioShack Corporation (NYSE:RSH) was displaying in managing its inventory and raise its quarter on quarter sales, the investors have been staying away from increasing their presence in the stock. In the past 6 months, the stock has shed 21 percent of its market value and these losses increase to 26 percent over the past quarter time frame. Post yesterday’s sell off, the stock price had settled at $2.41 per share, which is 44.7 percent lower than its prior 52 week high price point.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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