RadioShack (NYSE:RSH) to face more shock

RadioShack (NYSE:RSH) started off in Boston as a small retail and mail order business; and since its initiation the company has been doing well, until recently. RadioShack (NYSE:RSH) that was already going through a major crisis of potential bankruptcy had to deal with another jolt with the resignation of their CEO. John Feray, the head of the company, who had joined only a few months back decided to part ways with this already financially collapsing organization. The one person, whom everyone was looking up to, to save the remains and be the captain of the ship in this storm, turned out to be the first person to jump off and protect his reputation.

Monday, September 12^th proved to be the last working day for John Feray. According to a press release Feray resigned on some personal issues. RadioShack (NYSE:RSH) immediately filled up the position and asked Holly Etlin – MD at AlixPartners and RadioShack (NYSE:RSH)’s advisor – to become an acting CFO. Holly has already been in the same position for a period of 7 months before Feray took over as the permanent CFO of RadioShack (NYSE:RSH).

Feray became part of RadioShack (NYSE:RSH) in the beginning of this year, January 2014; before that, he was working for Dollar General. There, he was handling the position of senior vice president of finance and strategy division. Becoming a CFO, directly of RadioShack (NYSE:RSH) was a big step for Feray and he openly and welcomingly accepted this position. He went on the record to say that RadioShack (NYSE:RSH) is undoubtedly an iconic American retailer business. Feray was well aware of the company’s crises from the beginning and initially he showed a lot of interest and enthusiasm in working for the turnaround plan and making it operational, so that the company can once again regain its footing in the market.

His resignation could not have come at a more financially vulnerable time for the company. It was clearly stated in the SEC report that there is no surety of the success with the company’s new drawn plans. It had been affirmed that if the company was not able to deal with this downfall, eventually it would have to face bankruptcy.

Before the start of the weekend, Fitch Ratings had also graded RadioShack (NYSE:RSH)’s rating on an all time low. The bond credit charges of the company had achieved a lower scale and had fallen in on default imminent with little prospect for recovery range. The Ratings further went on to say that as the holiday season approaches, RadioShack (NYSE:RSH) will not be able to meet its financial costs. The company is running short of cash and influx of money to control and handle all its shortcomings.

Feray’s resignation did not improve the entire situation. As the CFO of the company leaves this drowning ship, the shares fall by another 20%. Since there was an overall increase in the market, the company’s share has gained a slight momentum of 20 cents per share; showing signs of improvement that will not be fruitful in the future.