B. Riley Financial Suspends Preferred Stock Dividends - Sell (Rating Downgrade)

January 21, 2025 11:04:03 pm

Source: SeekingAlpha

2025-01-21 23:04:03 ET

Summary

On Tuesday, preferred shares of B. Riley Financial cratered after the company suspended quarterly dividends.
Unpaid dividends will continue to accrue and after six quarters, preferred shareholders will gain the right to nominate two additional directors.
However, with more than $1.6 billion in debt ranking ahead of equity holders in the company's capital structure, it is increasingly difficult to depict a positive outcome for equity holders.
At this point, addressing more than $730 million in debt maturities until the end of 2026 looks like a Herculean task.
With a very high likelihood of equity holders being wiped out in a potential bankruptcy, I am downgrading the company's common and preferred shares to "Sell".

Note

I have covered B. Riley Financial, Inc. or "B. Riley" (NASDAQ: RILY , NASDAQ: RILYL , NASDAQ: RILYP , NASDAQ: RILYM , NASDAQ: RILYK , NASDAQ: RILYN , NASDAQ: RILYG , NASDAQ: RILYT , NASDAQ: RILYZ ) previously, so investors should view this as an update to my earlier articles on the company. ...