B. Riley Financial: Founder's Hail Mary Move Might Not Play Out

(12min)

Summary

  • B. Riley Financial's shares lost almost 70% of their value last week after the company warned of massive asset impairments, suspended its common stock dividend and disclosed an SEC investigation.
  • Last year's ill-advised participation in the management buyout of Franchise Group continues to haunt the company.
  • While the company appears to be on the brink of collapse, founder Bryant Riley is not willing to throw in the towel yet, as evidenced by Friday's take private offer.
  • However, chances for an eleventh-hour bailout appear to be slim at best.
  • At this point, only the most speculative investors should consider getting involved with B. Riley Financial. Dependent on the assumed outcome, there are a number of interesting bets across the company's capital structure.
  • Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More »

Stock market and exchange, chart and numbers.

Torsten Asmus

Shares of controversial investment bank and financial services provider B. Riley Financial or "B. Riley" (NASDAQ:RILY) lost almost 70% of their value last week after the company suspended its quarterly dividend, delayed the filing of its quarterly report

Massively Outperform in Any Market

Value Investor's Edge provides the world's best energy, shipping, and offshore market research. Even during turbulent market conditions, our long-only models have outperformed the S&P 500 by more than 30% YTD.

We also offer income-focused coverage geared towards investors who prefer lower-risk firms with steady dividend payouts. Our 8-year track record proves the ability of our analyst team to outperform across all market conditions. Join VIE now to access our latest top picks and model portfolios.

This article was written by

19.78K Followers

I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.

I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.

Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of RILYZ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About RILY Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on RILY

Related Stocks

SymbolLast Price% Chg
RILY
--