Market Overview

Investors Think A RadioShack Default Is Less Likely Now Than It Was In 2014

Related RSH
RadioShack Offers Statement Related to Stock Price, Trading Volume
RadioShack-Sprint Deal Sends Mixed Messages, Could Confuse Customers

RadioShack Corporation (NYSE: RSH) continues to struggle, and Monday's news of potential asset sales to Sprint (NYSE: S) is the company's final effort to remain liquid.

Bets on RadioShack's default probability indicate that participants are less certain of default in February 2015 than they were back in November 2014. One-Year CDS on RadioShack fell ~57 percent since the high in early January 2015.

(Chart from Bloomberg)

Recall that savvy investors who bought RadioShack CDS betting the company won't go bankrupt have also produced nearly $600 million in short-term funding for the struggling retailer.

Will RadioShack Be The First Retailer To Go Bust In 2015?

Back in December 2014, Bloomberg reported that RadioShack's biggest holders, including DW Investment Management and Saba Capital Management, arranged a survival cash loan of $585 million to get the retailer through the holiday season.  

RadioShack is currently deriving equity value soley on the basis that it will take loans and not default within the next year.   

In Monday's trading, the stock traded down nearly 13 percent.

Posted-In: Long Ideas Education Technicals Trading Ideas General


Related Articles (RSH + S)

View Comments and Join the Discussion!

Partner Center