RadioShack (RSH) Continues to Fade as Traders, Investors Lose Hope

RadioShack (NYSE: RSH) shares are now comfortably below the $1 level and Wall Street isn't changing its tune on the stock. And, there aren't too many options for the one-time electronics retail giant.

Currently, RadioShack as agreements in place that prevent it from closing some 200 locations, many of which are unprofitable. With its recent 10-Q filing, the retailer said, In March 2014, we announced we would seek consent from our lenders under the 2018 Credit Agreement and 2018 Term Loan to pursue a program to close up to 1,100 stores. In May 2014, we announced that the terms on which the lenders were then willing to provide this consent were not acceptable to us. We may continue to have discussions with our lenders regarding the possible closure of a substantial number of stores, although there can be no assurance that we will be able to obtain lender consent on acceptable terms. In the interim, we are continuing with a plan to close fewer stores and pursuing other cost reduction measures permitted under the existing terms of the 2018 Credit Agreement and 2018 Term Loan.

RadioShack said it recently had about $61.8 million of cash and equivalents, down from $180 million at the end of 2013. It expects to have enough cash to fund operations through May 2015 or so. There is $361.9 million available under its 2018 Credit Facility as of May 3, 2014.

Unless RadioShack can convince lenders that its turnaround plan will go through and come to better terms for a Credit Agreement, shares are likely to be pressured for some time. It's not expected that another company will move to acquire RadioShack as it has quite a bit of debt at over $600 million.

Traders might see RadioShack as a quick value play as its turning into one of those stocks that could pop higher on the slightest bit of good news. But, that seems like a very risky proposition.

Shares of RadioShack are down 10.6 percent.

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