Exiting B. Riley Common Stock – Insider Weekends
B. Riley Financial Inc. (RILY): $21.87
Market Cap: $674.05 M
Key Insights
- Franchise Group (FRG), a company that owns businesses like The Vitamin Shoppe, Pet Supplies Plus, Sylvan Learning, Buddy’s Home Furnishings, etc. was taken private by its CEO Brian Kahn in August 2023 in an all cash deal worth $2.8 billion.
- B. Riley invested $216.5 million of new capital in the deal and has 31% voting interest in FRG.
- John Hughes, a co-founder of Prophecy Asset Management pled guilty to defrauding clients of $294 million. Mr. Hughes has named Brian Kahn as a co-conspirator.
This has been a difficult year for the mid-market investment firm B. Riley (RILY). Mark-to-market losses on its equities portfolio, which mostly consisted of small cap stocks and often not the most financially stable ones, had caused the company to report losses in three out of four quarters in 2022. It did not help that this was followed by a short report by Wolfpack Research in February 2023.
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