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RadioShack Is Running Out of Time and Should Just Pull the Plug

Tickers in this article: AMZN EBAY RSH

NEW YORK (TheStreet) – Back in June I told you electronics retailer RadioShack was sending out bankruptcy signals. Had you listened you would be thanking me today.

At the time, the stock traded around $1.50 per share and was down 43% on the year. Right now the stock trades around 70 cents, down over 73% for the year to date. RadioShack has now lost roughly 80% of its value in 2014 alone. The company reports financial results Tuesday after market close.

It's hard to imagine these shares traded in the $20 range four years ago. It seems like a distant memory. It seems fitting. A little over a year the RadioShack name may only be remembered because it will no longer be seen.

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Moody's Investors Service thinks RadioShack may run out of cash by as early as October 2015. Analyst Mickey Chadha said,

"Absent a credible turnaround strategy to improve sales growth and increase earnings, RadioShack will be hard pressed to remain relevant in the increasingly competitive mobile phone and consumer electronics business."

In the case of Radio Shack, management has failed time and time again. The company has had almost two decades to adjust to the emergence of Amazon and auction sites like eBay that have eroded RadioShack's in-store traffic and pressured its margins.

With no clear signs of a recovery, bankruptcy, as predicted by Moody's, now seems the inevitable outcome. Still, management isn't ready to give up the ghost.

The company just announced the opening of 23 new interactive, remodeled stores in the Washington D.C. metro area. The company also opened 21 of these remodeled stores in the San Francisco.

All told, the company has opened up 40 of such stores over the past year, arguing, "Customers have expressed their desire to interact with products before they buy." But Amazon isn't making this claim. Neither is eBay.

RadioShack management is hoping these new concepts will give shoppers a new retail experience while promoting what management considers "unique products from tech savvy inventors."

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Calls made to RadioShack requesting specifics on these "unique products" were not immediately returned.