You've mentioned that if FRG is worthless, which, likely because of the Badcock and CONNs bankruptcy and American Freight downturn, is probably taking a haircut in value. They still have the other pieces like Pet Supplies Plus and Vitamin Shoppe. If these are sold at the valuation multiples that RILY had outlined in their deck, wouldn't that eliminate most of the debt that FRG and RILY have? You mentioned that in your stack last year, so was curious why this wasn't part of the writeup this time around. I agree though, if they are writing off all of FRG and assuming it's worthless/can't sell the parts there's little chance for a turnaround and bankruptcy will be around the corner.
Of course, without a 10-Q, everything is just speculation. I don't think bankruptcy is on the cards or table until at least 2025 with a GAG sale, they should have enough cash on hand to pay out liabilities and maybe wait around for the FRG SOTP sale.
FRG take-private was essentially an LBO with a significant amount of leverage. Granted, we don’t have segment financials for that business. All we know is that RILY is marking it down. At some point it’s a question of cash runway regardless of SOTP value. I think the remaining FRG pieces have value but will they have enough time to realize it?
As for RILY -- I think they have runway to 2026 debt maturities assuming no black swan events or deterioration in operating businesses. I’d love to see the Q to better understand how the good businesses are performing vs the weaker ones (ie financial consulting EBITDA vs loan book EBITDA).
Definitely on my radar! I’d love to get the latest Q to speak intelligently about the remaining businesses… maybe I’ll do something brief with the limited information we have at this point.
Something that looks cheap doesn’t always translate to value. If you don’t understand the business or how its management is operating, don’t invest. There are just too many clouds and question marks surrounding this company. Your time will be better spent on analyzing better companies.
Value Don't Lie - Can we get an update on this topic based on the two business sells that were announced?
You've mentioned that if FRG is worthless, which, likely because of the Badcock and CONNs bankruptcy and American Freight downturn, is probably taking a haircut in value. They still have the other pieces like Pet Supplies Plus and Vitamin Shoppe. If these are sold at the valuation multiples that RILY had outlined in their deck, wouldn't that eliminate most of the debt that FRG and RILY have? You mentioned that in your stack last year, so was curious why this wasn't part of the writeup this time around. I agree though, if they are writing off all of FRG and assuming it's worthless/can't sell the parts there's little chance for a turnaround and bankruptcy will be around the corner.
Of course, without a 10-Q, everything is just speculation. I don't think bankruptcy is on the cards or table until at least 2025 with a GAG sale, they should have enough cash on hand to pay out liabilities and maybe wait around for the FRG SOTP sale.
FRG take-private was essentially an LBO with a significant amount of leverage. Granted, we don’t have segment financials for that business. All we know is that RILY is marking it down. At some point it’s a question of cash runway regardless of SOTP value. I think the remaining FRG pieces have value but will they have enough time to realize it?
As for RILY -- I think they have runway to 2026 debt maturities assuming no black swan events or deterioration in operating businesses. I’d love to see the Q to better understand how the good businesses are performing vs the weaker ones (ie financial consulting EBITDA vs loan book EBITDA).
Can we get an update on this topic when you get a chance?
Definitely on my radar! I’d love to get the latest Q to speak intelligently about the remaining businesses… maybe I’ll do something brief with the limited information we have at this point.
Thanks for the thoughts. You look at it from the perspective of equity. Have you considered the baby bonds?
Thought about them and still potentially worth a look. Will report back!
🤙
Something that looks cheap doesn’t always translate to value. If you don’t understand the business or how its management is operating, don’t invest. There are just too many clouds and question marks surrounding this company. Your time will be better spent on analyzing better companies.