RadioShack Could Be Delisted From NYSE

Douglas A. McIntyre

RadioShack Corp.’s (NYSE: RSH) stock has traded below $1 long enough that it has received notice from the New York Stock Exchange that its shares could be delisted. It would be one more nail in the nearly dead consumer electronics company’s coffin.

According to an 8K filing with the SEC:

On July 24, 2014, RadioShack Corporation (the “Company”) was notified by the New York Stock Exchange (“NYSE”) that the average closing price of the Company’s common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price for continued listing on NYSE under Rule 802.01C of the NYSE Listed Company Manual.

Under NYSE rules, the Company has six months following receipt of the notification to regain compliance with the minimum share price requirement. The Company can regain compliance at any time during the six-month cure period if the Company’s common stock has a closing share price of at least $1.00 on the last trading day of any calendar month during the period and also has an average closing share price of at least $1.00 over the 30-trading day period ending on the last trading day of that month or on the last day of the cure period.

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RadioShack’s financial problems are so great that coming back into compliance will be extremely difficult. Its shares have dropped from a 52-week high of $4.36 to a low of $0.80. The stock traded at $0.81 recently.

In the quarter that ended May 3, RadioShack lost $98 million on revenue of $737 million. In the same quarter the year before, it lost $28 million on revenue of $848 million. Matters have been made worse, because some of RadioShack’s creditors have blocked it from a plan to close approximately 1,100 stores in the hope of sharply cutting costs and buying time to redesign some of its locations to attract customers.

The NYSE notice is likely to cause additional anxiety among RadioShack investors, which in turn will drive the share price lower. RadioShack, on its way to Chapter 11 in the minds of many financial experts, may get their faster than expected.