Within days of Circuit City getting this notice, its creditors forced it into bankruptcy. I am sure they will follow the same road. The NYSE has issued Radioshack with a delisting notice. RadioShack reported the notice late Friday, but they likely received it days earlier. Circuit City announced their delisting on October 31, 2008. (They received it on the 25th.) They filed for Chapter 11 bankruptcy ten days later, immediately started closing and liquidating 155 stores to pay its creditors, and liquidated the remaining stores shortly after the holidays. Most companies that get delisting notices don't implode that quickly, but RadioShack's circumstances are uncomfortably similar to Circuit City's. They both became entirely dependent on asset-based loans to survive. The company may not go bankrupt in 10 days, but barring some deus ex machina, this is RadioShack's end.
Best Buy is hanging on, actually. They're trading at over $30 right now, and has had strong profits: http://www.reuters.com/article/2014/05/22/us-bestbuy-results-idUSBREA4L0CM20140522 Best Buy isn't what they once were, but out of all of the big box electronic stores, they are holding on the best, because they've been adapting to the changed market.
I actually can't see how Radio Shack lasted this long. It seemed like there was no one in the stores. Best Buy on the other hand seems to have changed their model to stay in the fray, accepting their place as a showroom for the internet, but only time will tell if this is going to be a good lasting decision.
Why do you say this? Is Best Buy not strong? I thought it was. Radio Shack is a different story, and they've been on the "endangered species" list for a long time now as far as I'm concerned. This news doesn't really surprise me.
I agree that they lasted longer than anyone would have thought. I thought, at first, years ago when cell phones became so wide spread they would branch into the market. they did but didn't try to stay competitive.
Be wary of predictions. They might come true, they might not. If someone can't also give me an exact date, I take them with a grain of salt. I only wish I could predict such things with absolute certainty - I'd first predict the winning powerball or megamillions numbers the next time one of them hits $600 mil, THEN I'd worry about what to invest in, avoid, short, etc.
I would agree JR, ultimately, Best Buy has made a choice to try to stay relevant in the market as it is for big box electronics/appliance retailers. It doesn't seem like this future will be bright for a long time to come, but with Amazon struggling to make profits it could be a waiting game. Ultimately, I don't feel confident in the long term of that market on either side.
It was the inevitable that Radioshack was going to go downhill from the get-go. Their stocks are worthless so the fact they got the delisting notice was not surprising. I would say they were too late in pulling themselves out of the gutter.
This was definitely inevitable. There was a thread on here about RadioShack the other day and the consensus of the (very wise) people on this forum was that RadioShack's time is listed. Granted, it isn't over yet, but the clock is ticking.
