The common shares of B Riley Financial (RILY) are getting smacked hard today. Shares are down $3.40/share now at $32.08.
I don’t see new news for them, but Core Scientific–a crypto company which owes RILY $42 million did file for bankruptcy yesterday. That filing is here.
There doesn’t appear to be any reaction in the baby bonds at least thus far. Be careful out there.
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Since RILY has about $230 million in cash and their preferred obligations are about $8 million annually, considering that common dividends (which would need to get suspended first before preferred) are about $118 million annual, would it be reasonable to conclude that preferred dividends are in no danger? Just a very quick napkin analysis, curious how others evaluate such situations.
I am baffled that the common RILY is tumbling, yet the bonds are holding up better now than the October drop due to Babock and the Targus deal. Odd indeed. Maybe the engine is running better than the car looks?
Did I read right yesterday that they are dumping more money into CORZ? Guess it doesnt matter to me as I am out.
Waiting for some better entries into market if they occur as I have money sitting from the sale of 600 Rileys. I see my portfolio gave back half of its gains from the recent highs. I was up 14% on October purchases, now around 8’ish%. My IG long-term bonds finally gave up a few percentage points, too, but most are still up 10-14% from their October purchase dates. A good cushion going forward as I’m sure I’ll have some bomb rip thru my holdings per usual, but if not then maybe I have finally learned my lesson on high risk aversion after a decade and some change.
FWIW There are a few RILY threads currently on SA including one by PST, and an obnoxious guy named Stanley Goodspeed has been incessantly and repeatedly hammering home his same one sided, overstated bear thesis over and over and over again for about the last month… and he’s demanding everyone thank him for his wisdom….
RILY didn’t just start dropping fast in the last day or two, but definitely accelerating with the CORZ death spiral. Riley bought in back in July – the stock rose until mid Aug, then continued their latest decline- off almost 2/3.
Truly ugly- wish I didn’t own any of it.
I hope they don’t throw that other $72M onto the rubbish heap to rescue CORZ.
Rilyz has looked to me strangely low and getting strangely lower for a long time.
Anyone else have any opinions?
Reaction in the baby bonds was yesterday. RILYZ dropped about a buck to $18. The $42M loss from CORZ is not a big deal for the bonds. Clearly, there will be more shoes to drop in a recession but they have a good track record of managing risk in seemingly high risk situations. It’s a speculative bond but doesn’t really deserve to trade at a higher YTM than other deep junk bonds.
Thanks Landlord–didn’t look at yesterday, but RILY has many speculative investments and while I don’t think super damage will be done to them, but depending on general economic conditions they could be wounded significantly.
I said this yesterday..I don’t trust them. Sold my preferreds.
Bought MCD bonds yielding 5.2%,,,sleep better. Good luck.
Sold VNO Too. Big chicken…
Sometimes it takes me a while to get a full grasp of what a company is all about and where it is heading. In the case of RILY, I’ve basically given up and sold both my common and preferred shares earlier this year after holding them for a fair bit.
My difficulty starts with this:
“The company generates revenue from investment banking and capital markets advisory services as well as small cap equity research, wealth management, restructuring advising, retail liquidation, real estate advising, fixed income advising, ownership of several retail brands and communications companies, and its own investment book.”
So, what, maybe a bit of Oppenheimer and Ritchie Bros, with some conglomerate attributes, and a bit of a BDC with a far greater % of equities held than most any. And a much larger amount of unrealized equity losses than I would ever accept in a BDC. So really I don’t get RILY and am not qualified to either pass judgement or to invest. And I think that I was, in part, guilty of chasing yield. Even if I understand them at some point, I suspect they’re too speculative for this old geezer. But I’ll still keep my eye on them because, hey, you’re never too old to learn…. Sorry to rattle on, but the -30 wind chill here keeps me inside and catching up on this fine site.