Those buying RadioShack Corp.’s stock, even for mere pennies, are just wasting their money. So says the company.
The failed consumer electronic retailer’s shares
tumbled 30% in morning trade Friday to 13 cents, but based on the company’s view, they should be down 100%.
In light of the recent trading volume in its stock, RadioShack felt compelled late Thursday to repeat its warning that its shares will likely end up being worthless in the pending Chapter 11 bankruptcy proceedings.
“Equity holders of a company in Chapter 11 bankruptcy generally receive value only if all claims of a company’s secured and unsecured creditors are fully satisfied,” the company said in a statement. “RadioShack said it believes that the claims of its secured and unsecured creditors will not be fully satisfied, leading to the conclusion that RadioShack common stock has no value.”
Despite Friday’s selloff, the stock was still trading 30% above its closing price of 10 cents on Feb. 5, the day RadioShack filed for bankruptcy, after years of fighting to stay solvent.
The stock closed above 20 cents as recently as Monday, and daily volume since Feb. 5 has averaged 4.1 million shares.
View more information: https://www.marketwatch.com/story/radioshack-warns-investors-its-stock-should-trade-at-zero-2015-03-13