Radio Shack may be close to the end of its 94-year history; on Monday the New York Stock Exchange suspended trading of the company’s shares. OIN order to be traded on the exchange, a company must hold a market cap of $50 million or more. With the continuing rise of Amazon.com, Best Buy and Wal-Mart as competition, Radio Shack’s cash total fell to $43 million by November; the company’s credit added only another $20 million.
The company had 5,000 stores, but announced last spring that it wanted to close 1.100 of them. Because of the cost of severance, liquidating merchandise and the penalties for opting out of leases, the chain could only close 175.
Radio Shack has been fighting with Salus Capital, which gave the company $250 million in cash in 2013. One year later, Salus reconsidered; RadioShack accused Salus of attempting to call the loan because it disliked Radio Shack’s plans for restructuring, specifically the $120 million it got from lenders led from the New York hedge fund Standard General and Lifespeed Management.
RadioShack CEO Joe Magnacca was furious with Salus, stating, “Now, prompted by their narrow self-interest, they appear to be trying to manufacture a problem during the critical holiday shopping season in an effort to get out of a loan on which they have already reaped more than $35 million in fees and interest payments.” He added that the decision by Salus to cancel the loan hurts “other creditors, the hundreds of communities we serve, the many other businesses we support and the jobs of more than 25,000 hard-working people.” Magnacca did admit that Radio Shack could be nearing bankruptcy.
Radio Shack’s stock fell over 70% in 2014.