RadioShack Shares Have Been On An Absolute Tear

Just this week, shares of RadioShack have more than doubled, bringing the stock back above a dollar after it officially became a penny stock following a terrible first quarter report back in June.

Near noon on Thursday, shares of the electronics retailer were up more than 35% to $1.49 per share.

This chart from Yahoo Finance shows the meteoric rise in RadioShack in just the last few days.

Yahoo Finance

The huge rise in shares follows a report from Bloomberg's Jodi Xu and Lauren Coleman-Lochner earlier this week that said hedge fund Standard General is in talks with RadioShack about ways to raise cash to prevent bankruptcy.

Xu and Coleman-Lochner reported that Standard General increased its take in RadioShack to nearly 10% of the company's shares, up from 7% as of June 30.

In addition to the sharp rally in common shares of RadioShack, Xu and Coleman-Lochner also noted that RadioShack debt has rallied in this week.

This chart from FINRA shows that RadioShack bonds, which carry a 6.75% coupon and mature in 2019, are trading at 44 cents on the dollar, up from less than 35 cents just two weeks ago.

RadioShack, however, still faces huge challenges as it tries to close and remodel stores in an effort to shore up its finances.

A July 29 report from Moody's said, "RadioShack's deteriorating liquidity gives the company a limited window for executing a turnaround in sales and earnings."

And as BI's Ashley Lutz reported earlier this month, RadioShack's turnaround efforts might not be enough to save the business.

So, a huge week for RadioShack and investors who found themselves on the right side of this trade, but a potentially empty rally over the long-term.