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# B. Riley: Unsustainable Profitability And Eroding Net Asset Value (Archive)
- URL: https://www.huntingalphas.com/b-riley-unsustainable-profitability-and-eroding-net-asset-value-archive/
- Published: 2024-06-16T13:14:00.000Z
- Updated: 2026-02-27T11:30:28.000Z
- Description: B. Riley’s weakening core profitability is eroding liquidity and exposing a fragile balance sheet.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, RILY, Financials

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- My last assessments on B. Riley (initially Strong Sell, then 'Neutral/Hold' to protect against a short squeeze) were accurate, generating +6.42% of value.
- Two quarters later, B. Riley's core operating profitability has worsened, leading to an erosion of ROIC. It has a negative net interest coverage and its debt coverage ratios have spiked.
- All this is leading to a bleed of excess liquidity in the company, which has fallen 25% over the last 2 quarters.
- Despite a negative net asset value after, in my opinion, rightly excluding goodwill, the company's equities are trading at 2.7x P/B, indicating a mispricing.
- The common stock is a crowded short, so I'm hesitant to bet against it. My thesis focuses mostly on line items including and above EBIT, so it is valid for the other security classes too; where I prefer RILYM the most if forced to choose.

Read the full article [here](https://seekingalpha.com/article/4699477-b-riley-unsustainable-profitability-eroding-net-asset-value?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*