B. Riley Financial (NASDAQ:RILY) stock is facing a major setback following the release of its latest preliminary earnings results. The company reported a net loss per share of $14 to $15, with a total net loss for the quarter ranging from $435 million to $475 million.
This significant loss is attributed to impairment charges, including $330 million to $370 million from its investment in Freedom VCM, $28 million from Targus, and $25 million from a valuation allowance for deferred income taxes.
Chairman and co-CEO Bryant Riley expressed concern over the non-cash losses, primarily related to the performance of investments in Franchise Group, Inc. and Vintage Capital.
Further Struggles for RILY Stock
To strengthen its balance sheet, B. Riley Financial has suspended its dividend and will focus on core financial services businesses. As a result, RILY stock has plummeted by 52.1%, with heavy trading volume exceeding its daily average.
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Analysis:
The decline in B. Riley Financial’s stock value is a direct result of the company’s poor financial performance and impairment charges. Investors should be cautious as the suspension of dividends and refocusing on core businesses indicate internal struggles. This news serves as a reminder of the volatile nature of the stock market and the importance of thorough research before making investment decisions.