B Riley (RILY) announced a suspension of their preferred stock dividends today. The beleaguered financial firm has 2 issues outstanding which can be seen here.
Honestly they are a quarter or two too late on this–they should have done it previously. Both issues traded down sharply today–to close in the $6/share area. Dividends are cumulative.
This could be disaster for some holders OR it may present great opportunity for the speculators. The company finally filed old financials last week showing there is now a negative $143 million in equity as of 6/30/2024.
(In reply to Lee Schmidt)
As of a few minutes ago:
Issue Maturity Price IRR
RILYM 2/28/2025 $24.95 6.99%
RILYK 3/31/2026 $21.18 20.17%
RILYN 9/30/2026 $12.02 55.75%
RILYG 12/31/2026 $11.98 47.42%
RILYT 1/31/2028 $9.85 39.90%
RILYZ 8/31/2028 $9.39 35.55%
I guess I did see this coming but I held hope that they would turn around. Hold a tiny position in RILYZ Senior Notes: for those much smarter than I am should I sell these now???
I too have RILYZ, small position like yourself … been just holding out hope.
tdysr–Seems at these prices holding is your best move—if the position is small.
Why is holding best move. If B.Riley didn’t pay $2m of quarterly dividends means equity is gone. 2028 baby bonds subordinated to secured debt. There are no assets or cash to pay these maturities. I don’t understand holding scenario.
If it were me I’d probably sell, get what I can, and use the tax loss. Guess it has about 50% risk of bankruptcy. Best of luck with it in any event.
More curious as a learning point for many, in retrospect how you became enticed into buying in the first place? There is some whimsical saying to the effect of, more people lose money to high yield than hands held high in a stick up.
Tactius, So long ago my memory is clouded. But back about 2014 I listened to Cramer, yeah that guy. I bought into a company that owned a off shore pipeline gathering system for oil in an older field in shallow Gulf coast waters. It filed for BK after I got in it and there was a lot of talk it was too valuable to go to zero so I held on. Well it was a common stock and it went from Hero to Zero I could have gotten out and taken my loss but I decided to see if it would recover so I rode it down just as a lesson. The assets were bought by Tortoise fund which created a energy Reit which was so new at the time they were not sure the IRS would accept the REIT status.
Funny that Reit also went BK fool me once shame on you, fool me twice shame on me. ( I learned my lesson the first time)
I think some of the older III’ers know which Reit I am talking about.
I ended up selling the Riley a few days ago: my records at Fidelity are gone with the sale but most likely I saw some article on SA from which I was taking stock tips in those days. Since then I subscribed to Steve Bavaria newsletter on SA and have done very well (free ad for him !!!) Also continue to buy selected BB issues that are talked about here..on this very helpful site. btw the Riley position was tiny so not worth the risk of holding.
The good news is that your investment in RILYZ continues to get paid interest unless/until B. Riley defaults…a much better spot in the capital stack to wait for a turnaround than the preferred or common shares.
If you can afford to wait for better times, maybe you should.
Citadel
Better times????
Whence cometh better times?
I feel sorry for Art Hogan their Chief Market Strategist. Occasionally I still see him on CNBC & he manages to keep a smile on his face. He has 2 cute dogs he always puts on Twitter, nice guy.
If I was younger and felt good about the economy I might risk some fun money. But not knowing what is going on and how Riley’s sources of income will be affected like booking IPO’s, wealth management for clients and consulting businesses on merger and acquisition I’ll stay with my LTS BB holdings if I want risk.
Did anyone *not* see this one coming?
Should make selling their services tough. “Hi, you should buy B Riley financial advisory services from us, even though we are a financial train wreck and can’t pay our dividends.”
OK, enough snark.
What I find ironic about this company is that they literally have a division that focuses on disposition of assets of failed retail businesses. Perhaps that division can broaden their scope and eventually assist in the disposition of the rest of the company.
https://brileyfin.com/capabilities/retail-solutions/dispositions
Of course I’m just joking. I feel for those that have lost money on their preferreds and baby bonds. I took my lumps with their securities but luckily got out without too much damage a few years ago once the red flags started appearing.
Stacking–it is somewhat ironic as you say. I think Bryant Riley had a good thing going and then just couldn’t pull back when he should have thinking interest rates would stay at zero forever. Certainly some folks have gotten burned by him and I wish them well if they are still holding. I just don’t see a way out for them, but maybe B Riley has another trick up his sleeve.
And of course, probably due to massive ego, Bryant would show up with substantial Form 4 buys at every step down probably believing that just having others see he was putting his money where his mouth was, he’d be able to stop the slide without doing any major more painful fixes….