RadioShack Reportedly Near Bankruptcy

RadioShack Corp. is reportedly preparing to file for bankruptcy as early as February, according to a recent Wall Street Journal article.
Sources familiar with the situation spoke with the Wall Street Journal regarding the electronics chain’s recent financial situation. They confirmed a filing could come in the first week of next month.
Texas-based RadioShack is speaking with a private-equity firm that could potentially purchase its assets out of bankruptcy, according to the sources. However, these talks might not produce an agreement; sources stated RadioShack might attempt a traditional debt resolution method, such as bankruptcy.
The electronics chain has openly admitted it has been critically low on funds after posting losses in the last 11 quarters. RadioShack’s stock-market value has fallen to $50 million; on Wednesday, its shares dropped 13 percent to 41 cents each.
In December, RadioShack released a securities filing that warned it could be pushed into bankruptcy court if it was unable to raise new funds or receive assistance from lenders.
The securities filing reported RadioShack had $62.6 million as of November 1: $43.3 million in cash and $19.3 in borrowing accessibility.
Chief Executive Joe Magnacca unsuccessfully attempted to overhaul the company as a smartphone repair store. Almost three years of straight losses forced RadioShack to seek debt investors in order to stay in business.
RadioShack has been attempting to close 1,100 of its 5,000 stores since March 2014 but have failed to raise the funds to do so: only 175 stores have closed since the end of last October.
The 94-year-old chain began in the 1920s in Boston, first selling transistor radios and typewriters. The retailer became an American icon over the years but became irrelevant in recent years with the rise of technology and the internet.
As of late 2014, 24,000 people are employed by RadioShack.