RadioShack Surges 18% After Report Backs Litespeed’s Investment
RadioShack Corp. (RSH), the electronics chain that’s posted seven straight quarterly losses, jumped the most in almost a year after a report backed Litespeed Management LLC’s investment in the company.
RadioShack rose 18 percent to $2.54 at the close in New York yesterday, the most since Jan. 28, 2013. Litespeed, based in New York, disclosed an 8.1 percent passive stake in RadioShack in a Jan. 17 filing.
RadioShack’s shares gained after The Motley Fool, a securities research company, wrote about Litespeed’s investment. Jamie Zimmerman, Litespeed’s founder, is known for her “incredible market-beating performance in the early 2000s,” the Jan. 21 report said.
Earlier this month, Fort Worth, Texas-based RadioShack named John Feray, a former Dollar General Corp. executive, as chief financial officer. Feray is part of a team brought in under a turnaround effort led by Chief Executive Officer Joe Magnacca, who took over last year. Magnacca plans to introduce new-format stores and reduce the number of stocked items.
“I think that the article about the stake on Friday was probably the driving force” behind yesterday’s stock move, Oliver Wintermantel, an analyst at International Strategy & Investment Group in New York, said in a telephone interview. “People are saying, ‘What is my downside at $2?’”
ISI has a neutral rating on the stock, the equivalent of a hold.
RadioShack is “a perfect candidate” for Litespeed, the Motley Fool report said. “Zimmerman is known for being an astute analyst and if her track record holds up it could be good news for embattled RadioShack shareholders.”
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