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RadioShack gives investors harsh reminder

3/13/2015

Unusual trading activity in shares of RadioShack prompted the company to issue a public statement reminding speculators the company’s shares are soon likely to be worthless.


Bankrupt companies don’t normally issue such warnings, but the move was prompted by trading in the company’s shares on the OTC Pink exchange under the symbol RSHCQ after the company was delisted from the New York Stock Exchange.


In a statement issued on March 12, RadioShack said, “in light of the trading volume in its common stock at prices in excess of $0.20 per share, RadioShack Corporation today reiterated its belief that there will be no recovery for any equity holder in its pending Chapter 11 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, according to the 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.”


RadioShack filed for bankruptcy on Feb. 5.


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