Today B Riley Financial (RILY) has posted today an ‘open letter’ to board members and shareholders of a company which they have lent money.
In this case RILY lent money to a crypto miner named Core Scientific (CORZ) who quit paying interest and principal on loans in late October and now has threatened bankruptcy. In typical RILY fashion RILY has offered incremental financing to keep them out of bankruptcy. RILY’s loan was only $42 million and they have offered another $72 million in new money.
I don’t claim to understand Core Scientific (or any crypto miner), but I do know that RILY has made significant loans to marginal company’s in the last couple of years (i.e. Babcock and Wilcox (BW), Arena Group (AREN) and others) and I mentioned this a few years ago on this site–I own no RILY securities, but I do worry about their finances as there is significant incestuous activity at play here.
Please make sure to do your deep due diligence on your B Riley investments (i.e. baby bonds). I know a few authors on SA push the baby bonds and they are likely ok–but just the same understand what you own.