B. Riley Shares Plummet 50%, FRG Drama Doesn't Bode Well For Q2: CEO
Portfolio Pulse from Anthony Noto
B. Riley Financial Inc. (NASDAQ:RILY) shares plummeted over 52% due to delayed Q2 earnings and an SEC investigation into its disclosures related to Franchise Group, Inc. (FRG). The SEC is probing whether B. Riley properly informed investors about risks associated with FRG and its former CEO, Brian Kahn. Nomura Holdings Inc. is also involved, having arranged a $600 million loan for the FRG acquisition.
August 12, 2024 | 6:07 pm
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NEGATIVE IMPACT
Franchise Group is under scrutiny due to its association with B. Riley and former CEO Brian Kahn. The SEC is investigating whether B. Riley properly disclosed risks related to FRG.
The SEC investigation into B. Riley's disclosures about FRG and its former CEO could negatively impact FRG's reputation and financial stability.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 80
NEGATIVE IMPACT
B. Riley Financial shares dropped over 52% due to delayed Q2 earnings and an SEC investigation into its disclosures related to Franchise Group. The firm is also postponing its quarterly earnings report.
The significant drop in share price is directly linked to the delayed earnings report and the SEC investigation, which raises concerns about the firm's transparency and financial health.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100
NEUTRAL IMPACT
Nomura Holdings is involved in the B. Riley and FRG drama, having arranged a $600 million loan for the FRG acquisition. The handling of this loan going forward is uncertain.
While Nomura's involvement in arranging the loan is significant, the direct impact on its stock price is less clear compared to B. Riley and FRG.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60