Yes this is the same RadioShack that the Onion lampooned back in 2007 joking that even their CEO can't understand how they are in business.
So can Lance turn their fortunes around? What does the market think? There was no impact on the announcement of the deal (12:00 on Thursday) which was timed to correspond with the finish of the final time trial stage of the Tour de France.
BUT then yesterday it was up over 10%. There was news on the day: an upgrade and a new deal with T-Mobile that may have affected it. Or was it that small investors (cyclists?) take more time to trade? Only time will tell.
Here is a finance article (ok, at least a business article) from Bicycling.com that addresses some of the same issues.
Boulder Report » Blog Archive » Can Lance Armstrong Save RadioShack?:
"But the upsides aren’t quite as crystal clear for RadioShack. The company’s fortunes have been slowly sagging - along with its stock price - for almost a decade.Don't bet against Lance
The stock itself peaked at $76.62 a share in November…of 1999....It trades now for $14.67 per share. That’s up over 100 percent from a March 9 low of $6.47, but well below its last peak, in June 2007, at over $34 a share.
....But stock prices and short interest are not the problem; rather, they represent the real problems the company faces.
For years, RadioShack has had an image as a somewhat dowdy retailer of necessary but unsexy items, including a whole roster of small electronics components whose purposes are dimly understood outside of a small subset of tinkerers."
As we've seen first when he came back from cancer to win 7 tours, and then again this year when he showed not only great marketing savvy and a strong base of support (he has over a million followers on Twitter alone) but also amazing determination when he came back from a three year absence AND a broken collarbone as one of the oldest riders in the Tour to get a podium finish (which he basically assured less than an hour ago on the slopes of Mont Ventoux), most people do not get rich betting against Lance.
Either way it will be a great case study (for marketing if not finance) to follow. Stay tuned!
1 comment:
If you are Radio Shack, it cannot hurt to be associated with arguably the greatest athlete/champion of all time. Just look at the 77%(270K avg up to 480K avg) increase in TV ratings per stage for Versus compared to last year.
Cannot imagine how much the ratings jumped today as Lance answered every attack by the talented Schleck brothers on Mont Ventoux. The Armstrong brand seems to be as strong as ever as Lance once again steps onto the TDF podium. Unbelievable.
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