Wednesday, June 11, 2014


Also received this,

"[L]iquidity is dwindling. Fitch expects negative free cash flow of $200-$250 million over the balance of 2014, which, together with seasonal inventory build-up of $100-$150 million, would substantially eat into the company's total liquidity of $424 million as of May 13, 2014. This liquidity was comprised of cash of $62 million and revolver availability of $362 million

Fitch believes RadioShack does not have material sources of liquidity beyond its revolver, as virtually all of its assets have been pledged to its credit facilities. Fitch expects excess liquidity to be very tight as we approach peak seasonal borrowings, which could prompt a restructuring before year end."

1 comment:

Anonymous said...

The available revolver credit also requires pre-payments which will become increasingly difficult for RSH to make.

Far too much attention is being given to credit liquidity and far too little to shareholder liquidity.

RSH needs to maintain a $100 million market cap over a 30-day trading period to remain listed on the NYSE (on a pure valuation basis).

A de-listing would substantially impair equity, given that 72% of the float is institutionally-held and many funds cannot hold shares that trade OTC.

In addition to the credit liquidity issues, many other factors support speculation that RSH will get de-listed sometime between July and October of this year.

While the 2014 puts offer sizable returns, the OTM 2015 and 2016 puts considerably reduce the timing risks involved and are low hanging fruits that deserve considerable leverage.