The electronics retailer RadioShack is currently on the brink of losing the company, according to its report Sept 11.
RadioShack confirmed losing money in the third quarter this year. The company revealed that if does not work out this issue; it will have to reorganize its business affairs and restructure its debt, and may even face bankruptcy.
One Wall Street analyst ripped the electronics company price target to zero and cautioned of a possible bankruptcy.
Radioshack reportedly earned $673.8 million in the second quarter this year, which was lower than the $861.4 million during the second quarter of 2013.
Store sales dropped down 20 percent, while net loss was reported at $119.4 million, more than twice as much as the % 51.1 million losses in the second quarter of 2013.
"For the past 18 months we have been working hard on our turnaround plan. While we are advancing on many fronts, we may need additional capital in order to complete our work," states RadioShack CEO Joseph Magnacca regarding the bankruptcy issue on Sept. 11.
"As a result, we are actively exploring options for overhauling our balance sheet and are in advanced discussions with a number of parties," he added.
In an attempt to boost sales, RadioShack previously released a Super Bowl commercial supposedly making fun of itself and is entitled "The '80s Called: They Want Their Store Back," to show that the company is "out with the old and in with the new."
It featured celebrities like Mary Lou Retton and Hulk Hogan trying to steal the store's obsolete merchandise.
The "self-depreciating" advertisement reportedly driven sales up, with RadioShack shares being sold at $2.51, an increase of 4.58 percent after the commercial aired.
Meanwhile, possible initial actions that can be reportedly done by the electronics company to retaliate the impending bankruptcy would be to file for a Chapter 11 of the Bankruptcy Code, allowing the company to restructure its debt.
However, if the electronics retailer does not bounce back from the bankruptcy issue from restructuring its debt with creditors, it may have to liquidate its assets under Chapter 7 of the Bankruptcy Code of the U.S. Filing a Chapter 7, according to the report, will put the company in a "self-inflicted death sentence."
