Late Thursday night, Bloomberg reported that RadioShack Corp. (NYSE: RSH) had reached an agreement with a group of lenders led by hedge fund Standard General to refinance some $590 million in RadioShack debt, giving the troubled consumer electronics retailer enough cash flow to purchase inventory for the coming holiday season.

Needless to say, investors are beating down the door to get their hands on the company’s stock, which closed at $0.99 last night and traded at $1.55 in Friday’s premarket. Do they really believe that everything is now going to turn out all right for RadioShack?

The chief financial officer of RadioShack resigned in the middle of September, after just seven months on the job and just one day after the company announced that unless it could find a rescuer it would have to file for bankruptcy. The company’s creditors earlier this year blocked a management plan to close 1,100 stores and allowed RadioShack to close just 200.

According to Bloomberg, the new agreement includes refinancing of a $535 million line of credit from GE Capital, the finance arm of General Electric Co. (NYSE: GE). Standard General is RadioShack’s largest shareholder.

Just to be clear about this: RadioShack has made huge losses for two years. The company’s plan to close stores was severely curtailed, and whatever the terms of the agreement with Standard General and the other lenders, there is almost no chance that any holder of common stock will see a dime when the company files for bankruptcy, as it inevitably will.

Has anyone heard what RadioShack is going to do differently going forward? The company can’t close stores. The deal with hardware maker and accelerator PCH International that RadioShack signed in June was much too little and much too late. Even if it is successful, it won’t move the needle significantly on revenues or profits. At best the company will attract more of its loyal hobbyist customers.

About 90 minutes before markets open Friday morning RadioShack’s, shares were trading up about 46% at $1.44, in a 52-week range of $0.55 to $3.88.

ALSO READ: Retailers Hiring the Most Employees for the Holidays

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.