Financial services company B Riley (RILY) which had gotten a bounce in the last week up into the $24/share area are tumbling again–trading this morning at $18.62. Shares had been as high as $43 only a month ago. Short sellers have had the company under attack all year long starting in February with a report from Wolfpack Research.
As we all know RILY has made a gaggle of marginal investments all of which Richard LeJeune covers on Seeking Alpha in a credible argument on the bullish side from last week. Richard argues that fair value on the common shares is around $57 in spite of bad investments.
To name a few of their problem investments they include the Franchise Group, the Arena Group, Babcock & Wilcox and most recently Synchronoss Technologies.
Of course B Riley has many baby bond issues outstanding, as well as 1 preferred issue and their common stock. The yield on their common stock is now over 20%–great opportunity or trap? All of their issues are here.
The speculator in me wants to buy some of RILY’s securities–but the conservative in me says ‘don’t do it’. I won’t be participating in this potential ‘bargain’.