Apparently there is an inverse relationship between negative fake news and share price performance. A recent Onion article that plays on RadioShack’s outdated image and irrelevance to the American consumer is having a positive effect on the company’s share price. RadioShack (NYSE: RSH) is up 0.7% in daily trading, outpacing the major US indices, despite reporting on Friday that the company plans to cut 280 jobs.
Job cuts are usually seen as bad news, or at least signs that a company is not in growth mode, but for RadioShack job cuts are pure comic gold. Even though one analyst claims that RadioShack has a “bloated infrastructure” and is still searching to find “categories and services that it can use to expand gross margin drivers,” RadioShack’s struggle is fake news’ gain, which investors are valuing far more than having easy access to robots that can wheel you cocktails (that you make and place on the robot). Only funny news rocket fuel like RadioShack could guarantee that it will not match last year’s earnings, and watch its share price soar.
The fake news regarding RadioShack is surprisingly close to the real story, as the Onion reports CEO Julian Day’s fake theories as to why the company continues to exist:
One of Day's theories about RadioShack's continued solvency involves wedding DJs, emergency cord replacement, and off-brand wireless telephones. Another theory entails countless RadioShack gift cards that sit unredeemed in their recipients' wallets. Day has even conjectured that the store is "still coasting on" an enormous fortune made from remote-control toy cars in the mid-1970s.
Even RadioShack CEO Can't Figure Out How RadioShack Still In Business – [The Onion]
Ahead of the Bell: RadioShack Job Cuts – [Yahoo! Finance]