B. Riley posts loss, cuts payout

investmentnews.com:

B. Riley Financial Inc. posted a wider quarterly loss, halved its dividend and delayed filing its annual report, citing a review of transactions with a key client that have drawn attacks by short sellers. Shares of the boutique investment bank fell 15% in late trading Thursday.

The delay was due to the review by its board and outside counsel of its dealings with Brian Kahn, the former head of Franchise Group Inc., B. Riley said in a statement. The investment bank also retained Moelis & Co. to help assess strategic options such as a sale for its appraisal and asset-disposition businesses, formerly known as Great American Group.

B. Riley’s fourth-quarter loss totaled $70 million, or $2.32 a share, compared with $59 million a year earlier, the Los Angeles-based company said. Revenue dropped to $346 million from $382 million. The dividend was cut to 50 cents a share from $1.

The payout was cut “to focus on the many opportunities we have to invest in our own business, including potentially repurchasing our debt at attractive prices,” Chief Executive Bryant Riley said in the statement. 

B. Riley didn’t give a firm estimate on when it will file the overdue report, formally known as a Form 10-K, but added it doesn’t expect any significant changes to the financial results it released Thursday. Such a delay, however, can unnerve investors because it puts off certification by the company’s outside auditing firm, and Bryant Riley declined during the conference call to tell an investor whether the auditors have agreed to sign off.

Shares of B. Riley have lost more than half their value in the past 12 months amid concern about its deals with Kahn, a former business partner who has been blamed by some investors for the 2020 collapse of