Caltrops - Tansin A. Darcos's Alter Ego





	[quote name="Commander Tansin A. Darcos"]At this link for <a href="http://pro.boomandbustinvestor.com/Radioshack/MBNBP513">a video ad for a newsletter</a>, Harry Dent, who runs his own newsletter, says that a major Texas-Based retailer is going to declare it is looming bankruptcy on Thursday, August 1, 2013 and that's when it will tell shareholders it is bankrupt. Some of the points he makes are: * It's a Texas-based company. * "A well known retailer that has graced the American landscape since the 1920s". * The retailer has been "a vital cog in our economy for over 90 years." * You've seen this business if you've been in a shopping center. * You've probably bought something from them. * Has over 4,400 locations in the U.S. alone. * Over 34,000 employees. * Eliminated its dividend last July. * Doesn't have enough money to pay a $375 million loan due 8/1. * No way it can come up with the cash to pay its loan by August first. * Has replaced its Chief Executive Officer, Exec VP of Operations, and Exec VP of Strategy. * Has negative net profit margins, negative net cash flow, and earnings won't even cover interest payments. * Is a big distributor for AT&T, Bose, Energizer, Verizon, HP, Apple, Intel, and will cause many of these and other companies trouble from loss of the massive distribution channel. He doesn't actually <i>say</i> who it is (the video is a teaser to get people to buy his newsletter), but I tried to see if I can figure out who he is claiming it was. So I went to check out major Texas Retailers. From his information I first thought it might be Whole Foods, but they have been paying dividends, and they're not old enough. Next, I thought it might be J. C. Penney (JCP). What's interesting is that JCP has been regularly declaring a dividend in January, April, July and October every year for over a decade. But they haven't paid <a href="http://www.nasdaq.com/symbol/jcp/dividend-history">a dime</a> in dividends since January of 2012. However, Wikipedia says JCP only has 1,100 locations. Scratch them for the moment but I'll come back to JCP a little later. The original link in the e-mail I get as one of the things I subscribed to was a long semi-encrypted link that doesn't give any information and eventually resolves into one that says what he's referring to; the URL for his video announcement shown above has the words "Radio Shack" in it, kind of giving away the answer. (Sometimes that link doesn't work, going there sometimes gets a "service unavailable" message, specifically if you reload the page.) His video player does not permit pausing or rewinding the video, which is one of those "guy saying something with the picture being the words he's saying" videos.) But I took a look. Radio Shack (RSH) <i>does</i> fit his statements. They have 7,500 locations worldwide. From 2004-2011 it announced a dividend every November. It announced dividends in March and May of 2012, but nothing since then. So RSH also hasn't issued <a href="http://www.nasdaq.com/symbol/rsh/dividend-history"> a dividend</a> in a whole year. CEO Jim Gooch stepped down 9/26/2012. So, I thought I'd pass this on because I think it's interesting to be able to see a prediction of something ahead of time. I'm curious to see if he's right. A Circuit-City style bankruptcy for RSH would be much, much worse; Radio Shack is a much bigger retailer than CC ever was. But what's interesting from my looking at this surprised me to discover that JCP is also struggling since it's also not paid a dividend in a year. He also mentions that a Minnesota company in the same industry with 160,000 employees has 1.7 billion in debt and no way to pay it back. Now, who could be in this group of very large Minnesota electronics distributors or sellers? 3M (MMM), Target (TGT), Best Buy (BBY). None has the obvious sign; they're all still paying dividends. 3M has 84,000 employees; scratch them, plus they're not a retailer. BBY has 167,000 employees but its last annual report as of Jan. 2013 says BBY has "only" 1.1 billion in debt. TGT has 365,000 employees but, according to its last annual report <i>does</i> have 1.75 billion in debt. I looked at Best Buy some 15 years ago and suspected they might have problems back then. But nobody's said much about Target. So I think he's predicting that either Best Buy or Target is another big electronics retailer in trouble, but again, Dent isn't naming names directly. He also says a lot more interesting things including that the Dow is going to drop over the next few years to about 1/3 of what it is now, to about 3,000. And that dollars right now are cheap and if you have foreign currencies to sell them because the dollar is going to be higher in a year. Not sure how much he's right on - I think he's dead on right about the upcoming (even worse than now) doctor storage, I've heard that from other sources - so again, I'm going to watch what happens. [/quote]