Computer and Electronics Retail

Mr. Wonderful of 'Shark Tank': This concept will hit 'zero'


As RadioShack announced that it would close 1,100 stores, investor Kevin O'Leary gave his acerbic take on the struggling electronics retailer during an interview with CNBC on Tuesday.

O'Leary, known for his take-no-prisoners approach to pitches from fledgling businesses on the reality show "Shark Tank," did not hold back. The successful tech entrepreneur said RadioShack's concept will "go to zero" and that a large wireless company will scoop up what's left of its physical assets.

RadioShack's market share has taken a hit from wireless companies, such as Verizon and AT&T, that let consumers buy electronics along with voice and data plans in a single transaction, he said on "Squawk on the Street."

People want wireless devices, not the obscure accessories found in most RadioShacks stores, O'Leary said.

"That has eroded the base on which RadioShack built its premise in the first place," he said. "I'm not an electronic hobbyist. I'm not going to buy a resistor. I buy a cellphone, an iPad or something like that."

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Radioshack share prices fell more than 13 percent Tuesday morning. The planned closures leave the retailer with 4,000 locations nationwide.

"If I'm an investor, would I deploy $1 million into their stock today?" O'Leary said. "No. I think it's going to zero."

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What's more, he said, RadioShack can't offer the variety that big-box electronic retailers can.

"The footprint of a RadioShack is too small to offer all that," O'Leary said. "They are destined to become part of an appendage of a provider. It's the only way there's value left. I'm sorry—you have to deal with reality once in a while."

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.