Dell May Be Courting Radioshack

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The Star-Telegram reports that a series of "unusually high" trades of Radioshack stock echoes investor speculation in the potential acquisition.

The last time that the Fort Worth-based electronics retail chain made noticeable headlines was back in 2006, when it unceremoniously let go of several hundred employees — via email. "The work force reduction notification is currently in progress," read the notices. "Unfortunately your position is one that has been eliminated." Not surprisingly, the company later found itself listed among CNNMoney's 101 Dumbest Moments in Business for that year.

Last April, BusinessWeek senior writer Peter Burrows wrote a column arguing that this merger is exactly what Dell needs as it increasingly shifts from its direct-purchase business model:

So here's an idea to consider: Why not buy RadioShack? It sounds nuts, I know. How would buying an 86-year-old milquetoast retailer with moribund growth help Dell's nascent turnaround effort?

At least on paper, this merger could plug some of the strategic holes that have appeared in Dell's approach in recent years. Obviously, RadioShack's 4,000-plus stores would give Dell a meaningful retail footprint, filling a critical need, given that more than 50% of all PCs sold in the U.S. are sold at brick-and-mortar stores.

Representatives at both companies have kept mum on the matter.