Shares of B. Riley Financial Inc. have been kicked around a lot as of late.

After starting with the fourth highest closing price for this year of $23.55, the stock price of the West Los Angeles financial services firm closed 3.6% lower on April 10 at $22.70.

In between, it closed as low as $14.86 on Feb. 21 and as high as $26.37 – its highest close for the year – on April 8. 

And on Feb. 29, the day it released its preliminary fourth-quarter results after the market closed, the stock price closed at $17.92 and then dropped by 8% the following day to close at $16.48. 

The shares closed at $22.94 on April 11. 

B. Riley reported on March 22 that it had been notified by the Nasdaq that it was out of compliance with its rules over filing its annual report for last year.

The company said it would take the necessary steps to regain compliance with the Nasdaq listing rules as soon as possible. The notification has no immediate effect on the listing of the company’s securities on Nasdaq.

For the fourth quarter ending on Dec. 31, the company reported a net loss of $70 million (-$2.32 a share), a wider one from the net loss of $59.4 million (-$2.08) in the same period of the previous year. Revenue decreased by 9% from the fourth quarter of the prior year to $347 million. 

For the full year, the company reported a net loss of $86.4 million (-$2.95), a narrower one from the net loss of $168 million (-$5.95) from the previous year. Revenue increased by 52% from 2022 to $1.6 billion. 

The net loss for last year was primarily related to Targus’ non-cash impairment and changes to mark-to-market valuations in B. Riley’s investment portfolio. 

Targus Cayman HoldCo Ltd. in Anaheim is a computer supplies company that B. Riley bought in October 2022 for $250 million. The Targus product line includes laptop and tablet cases, backpacks and universal docking stations.

In a conference call with analysts to discuss the preliminary financial results, Co-Chief Executive Bryant Riley said he was pleased with results and added that last year was a strong one for the majority of the company’s subsidiaries.

“However, the strength across our core business was masked by non-cash write-downs related to Targus and unrealized investment losses,” Riley said.

As the company moves ahead, it remains focused on charting the best path forward for its business, employees and shareholders, he added. 

Company solicits review

With those considerations in mind, the company announced it had retained Moelis & Co. in New York to conduct a review of strategic alternatives for its appraisal and retail liquidation businesses it had acquired when it merged with Great American Group in 2014, Riley continued. 

“Our appraisal business has historically been a steady, recurring performer and has seen strong growth over the last year,” he said. “Our retail liquidation business is more episodic, but over the years has provided meaningful profits, which we have used to deliver returns to our shareholders and reinvest in our business.”

Sean Haydon, a managing general partner at Charles Lane Capital in New York, asked during the conference call why B. Riley wanted to shed the Great American businesses and if there was a timeline on the sale.

Riley said that one reason to sell those assets was in finding prospects that represent a unique opportunity for the firm. 

And second, he said, was his belief that Great American is poised to take off with a different entity owning it, he said. 

“I think a larger institution with a bigger balance sheet is going to kill it with that asset,” he added.

“As far as how long, I think we’d like to have a pretty good sense of where we are by the end of the second quarter,” Riley said. 

Auction and liquidation revenues increased 39% to $103 million last year, up from $74 million in 2022, driven by a significant uptick in retail liquidation activity in the U.S. and Canada during last year and continued levels of retail liquidation activity in Europe.