The previous days' goofiness swirled around buzz that Blackstone Group
Talk about a short-term, speculative trade, people! Excited that The Shack might find a sucker, which might make them quick money, small-f foolish investors dove right in. However optimistic those rumors might sound, I suspect that actually finding a sucker to swallow RadioShack might be easier said than done.
Despite the company's (questionably effective) efforts to modernize with its recently introduced "The Shack" moniker, RadioShack faces a sketchy future in a very difficult climate. Consumer spending is lackluster overall, and at least some of The Shack's wares attract only a small niche of electronics geeks. The rest of its merchandise is commonly available at all kinds of other big-box retailers, including Best Buy, Wal-Mart
Need further warning signs? Check out RadioShack's revenue growth (or lack thereof) over the course of the last several years. Although it managed to grow sales again in 2009, the increase totaled a mere 1.2%. The company hasn't reported double-digit revenue growth since 2000. It really does make you think the poor old Shack's been "so last decade" for, well, about a decade now.
Investors would be better off buying lottery scratch-off tickets than making rumor-fueled trades on The Shack. There are far healthier retailers with superior growth out there, including the four I mentioned above.
Best Buy, Costco, and Wal-Mart are Motley Fool Inside Value picks. Best Buy and Costco are Stock Advisor selections. Motley Fool Options has recommended a bull call spread position on Best Buy. The Fool owns shares of Best Buy and Costco. Try any of our Foolish newsletter services free for 30 days.