RadioShack has been delisted from the New York Stock Exchange (NYSE). The company is now trading as a penny stock at the OTC Markets under the symbol “RSHCQ.”
Court approves Standard General’s bid for RadioShack
Today, the shares of RadioShack are trading higher driven by the report that the bankruptcy court approved a deal from Standard General that would allow Sprint to operate the stores of the beleaguered retailer.
The stock price of RadioShack climbed around 50% to $0.29 per share at the time of this writing around $2.04 in the afternoon in New York.
RadioShack prevented total liquidation after U.S. Bankruptcy Court Judge Brendan Shannon approved Standard General bid, which included $160 million (a combination of cash and debt forgiveness), save 1,700 stores and approximately 7,500 jobs. RadioShack will close around 2,300 stores. Standard General was one of the largest
Salus Capital Partners, the largest lender of RadioShack opposed Standard General’s offer and argued that its bid for the company’s assets is more lucrative than Standard General. Judge Shannon disagreed. He believed that Standard General’s offer was more superior because it included significant debt forgiveness.
Sprint-RadioShack co-branded stores will re-open this month
Under the ownership of Standard General, a re-imagined version of RadioShack will reopen this month. The stores will be co-branded with Sprint.
The wireless carrier is expected to obtain 30% of a space in each every RadioShack store, which would double its presence in the market.
The re-imagined RadioShack stores will focus on selling higher-margin speakers and chargers. It is uncertain whether the stores will still carry the RadioShack name.
Meanwhile, RadioShack CEO Joe Magnacca resigned from his position after two years of trying to revive the retailer. He implemented several efforts including rebranding with new store concepts and logo. He eventually expressed doubts in the company’s turnaround efforts after creditors refused its plan to reduce costs by closing 1,100 stores in June last year.
At the time, Magnacca said, “I don’t know if we can overcome this impasse, but we’ll continue to work at it.” The company eventually filed for bankruptcy in February.
