Troubled electronics retailer RadioShack Corp RSH.N said it may need to file for bankruptcy protection if its cash situation worsens, after reporting its tenth straight quarterly loss.
The company said it was also exploring other options, including a sale or an investment, and liquidation as the last resort.
RadioShack, whose sales have been in free-fall since 2010 as it struggles to compete with internet retailers, said in a regulatory filing it was working with its lenders and landlords to restructure its debt and cut costs.
"It would surprise me if we got to Nov. 1 without a bankruptcy," Wedbush Securities Inc analyst Michael Pachter told Reuters.
RadioShack shares, which are in danger of being delisted from the New York Stock Exchange, were up 2 percent at 95 cents in volatile early trading.
The company said same-store sales declined 20 percent in the latest quarter, while total sales plunged to their lowest in more than 20 years.
The company is being advised by a restructuring attorney at law firm Jones Day as it tries to strike a deal with creditors to close stores, two people close to the matter told Reuters on Wednesday.
RadioShack tried to close 1,100 stores this year, but reduced that number to 200 a year when lenders did not agree to the plans.
RadioShack's landlords, however, may be open to mass store closures if they believe it will allow them to find new tenants more quickly than in a bankruptcy, a source close to the matter told Reuters.
David Tawil, president of hedge fund Maglan Capital that focuses on companies approaching bankruptcy, said he saw "major execution risks" to RadioShack's recapitalization and turnaround efforts.
"I don't think that the chances are great that RadioShack survives," Tawil said, adding that the company's credit default swaps were trading higher, pointing to market expectations of a near-term debt default.
The company ended the second quarter with $30.5 million in cash and $658.0 million in debt, which matures between 2018 and 2019.
The company on Thursday raised doubts about its ability to continue as a going concern and said it may have to liquidate if it fails to restructure its balance sheet.
RadioShack stores, which have been around for more than 90 years, were once the go-to shops for budding innovators and engineers for products that ranged from vacuum tube speakers to the first mass-produced PC.
The retailer, however, has done little to transform itself into a destination for mobile phone buyers, with its e-commerce strategy lagging far behind rivals such as Best Buy Co Inc (BBY.N) and Amazon.com Inc (AMZN.O).
The stock plummeted as much as 20 percent to 76 cents on Wednesday after Pachter said the company could file for bankruptcy soon, making the stock worthless by the end of this year. The stock has fallen from a high of $78 at the peak of the dotcom boom.
The company's net loss widened to $137.4 million, or $1.35 per share, in the second quarter ended Aug. 2 from $52.2 million, or 51 cents per share, a year earlier.
Revenue fell nearly 22 percent to $673.8 million.
(Reporting by Ramkumar Iyer and Tanya Agrawal in Bangalore; Editing by Kirti Pandey and Saumyadeb Chakrabarty)