BWNB - B. Riley Financial: Audit Risk May Have Potential Rewards
2024-03-29 02:43:06 ET
Summary
- B. Riley's delayed filing of its 10-K raises concerns, but the company has a reasonable explanation and the filing is expected soon.
- The company's involvement with Brian Kahn and FRG has caused controversy, but there is no evidence of wrongdoing on B. Riley's part.
- The potential asset sales of Great American and the value of FRG's businesses could generate significant value for B. Riley.
- 70% short interest could be squeezed if the audit is finalized and asset sales come through.
Thesis:
Normally, I don't go anywhere near any company that has fraud allegations or any difficulty filing their required financial disclosures. B. Riley ( RILY ) has both. On March 15th, RILY missed the 15-day grace period to file its 10-K. While this delay is concerning, there are some mitigating issues that should be pointed out. Plus, I believe the company has a reasonable explanation for the delay, and the filing should be coming soon.
RILY's core business, BRS, B. Riley Securities, is a broker/dealer primarily focused on small-cap companies. It offers research, sales and trading, and investment banking. The company has acquired a liquidation/auction business (Great American) and a wealth management business to complement its other BRS businesses....
B. Riley Financial: Audit Risk May Have Potential Rewards