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Goldman Sachs ups ownership in Radio Shack to 12.6%

Posted Jun 12th 2007 12:39PM by Georges Yared (RSS feed)
Filed under: Rumors, Dell (DELL), Goldman Sachs Group (GS), RadioShack Corp (RSH)

In an SEC filing Goldman Sachs (NYSE: GS) Asset Management said it had upped its ownership of Radio Shack (NYSE: RSH) to 12.6% of the company's outstanding shares. In a separate filing Fidelity Asset Management has reduced its holdings in Radio Shack to 7.6% down from 15%. Goldman's actual share count in Radio Shack is around 17 million shares, of which the bulk was purchased following Radio Shack's March 31st quarterly release.

Radio Shack currently sports a $4.5 billion market capitalization and the stock has been one of the best performers this past 12 months. The company's 52-week low was $13.73, the high at $34.91. The stock is trading at $33.58.

CEO Julian Day joined Radio Shack last July with the strict mission to turn around this once ailing retailer. Mr. Day has undertaken several cost-cutting measures including trimming back the chain's 4467 store base. Closing unprofitable stores and consolidating stores where geographically sensible has contributed to this turn around.

One wonders if Mr. Day's mission is to turn around the company and sell it. Radio Shack is rumored to be looking for a possible suitor, possibly Dell (NASDAQ: DELL) . Dell is exploring new distribution methods and a store base of over 4,000 could be a step in the right direction. Goldman's recently increased share position after the stock has moved up so much is a strong vote of confidence for Mr. Day...

Georges Yared is the CIO of Yared Investment Research.