RadioShack Corporation (NYSE:RSH) is basically going to go out of business, Scott Tilghman told CNBC in a recent interview.
The comment comes from the B. Riley & Co LLC senior analyst after he put a price target of $0 on RadioShack Corporation (NYSE:RSH).
The analyst told CNBC:
“As we look at the various fundamentals, the challenges [the company is facing], the competitive environment, and what they are trying to do to turn this around, we really think that the downside is probably to $0. It just doesn’t look like this company is going to be able to make it out alive.”
Tilghman was also asked whether he sees the company just restructuring the equity down to $0 and reemerging after a few years or if the company will go away for good. The analyst said that it all depends on the kind of support RadioShack Corporation (NYSE:RSH) will receive from vendors.
He noted that what vendors will decide to do in terms of their relationship with the company will ultimately seal its fate. He cited the bankruptcy of Circuit City in 2008 wherein, he said, the vendors defined the fate of the company by changing payment terms and then stopping shipments of inventory. He added that if people see a similar pattern for RadioShack over the next key selling seasons, the company will really have to “fight to maintain any relevancy and rework its business model just to stay afloat even with a much smaller store base.”
The comments from Tilghman comes after another analyst also painted an unflattering picture of the RadioShack Corporation’s (NYSE:RSH) turnaround performance. Joe Feldman, Telsey Advisory Group assistant director of research, recently noted that Best Buy Co Inc (NYSE:BBY) has done better turning its business around than RadioShack.
Tilghman’s interview can be viewed below:
Investors in RadioShack Corporation (NYSE:RSH) includes Timothy S. Peterson’s Regiment Capital which had 1.1 million shares in the company, a stake that was valued at about $2.33 million, by the end of March. Another investor is Michael Kao’s Akanthos Capital which reported about 1.09 million shares in the company for the same period.