Shares of RadioShack (RSH) surged more than 16 percent today after a financial analyst suggested that Amazon (AMZN) might be interested in buying the beleaguered retailer if it files for bankruptcy, a filing some on Wall Street think is a forgone conclusion. This optimism outweighed concerns regarding the abrupt departure of RadioShack CFO John Ferary.
In a note to clients, Rob Peck of SunTrust Robinson Humphrey argued that Amazon, the world's largest e-commerce company, could use RadioShack's stores as a platform to showcase the Seattle-based company's products and services such as the new Kindle Fire smartphone. Amazon could also offer customers same-day delivery through local RadioShack stores.
Shares of Fort Worth, Texas-based RadioShack closed at $1.06, up 15 cents on Monday. Even with today's run-up, the stock has plunged nearly 60 percent this year.
Ferary resigned from the company on Sept. 12 after less than a year on the job, citing personal reasons. He was replaced by turnaround specialist Holly Etlin, who served as interim CFO from July 2013 to February 2014. She's a RadioShack advisor and managing director at AlixPartners.
RadioShack has 4,000 stores -- and serious financial problems. Earlier this year, it was forced to scale back plans to close more than 1,000 locations after lenders objected to that strategy. And last week, The Wall Street Journal reported that hedge fund Standard General and investment bank UBS (UBS) have offered the retailer a $585 million financing package to avoid bankruptcy.
CEO Joe Magnacca, who was hired last year to turn the company around, has overseen a remodeling program at 2oo stores aimed at making them more inviting, and he has revamped the chain's merchandising by focusing on businesses such as repairing electronic gadgets. None of these moves has paid off yet.