B. Riley Financial, a financial-services platform, recorded a loss in the third quarter of this year despite an uptick in sales, leading to a significant drop in its stock price. Shares plummeted by 22% to $27.07 during early trading, pushing the stock into negative territory for the year.
Unrealized Investment Losses Impact Bottom Line
The company’s loss amounted to $75.8 million, or $2.53 per share, compared to a profit of $45.8 million, or $1.53 per share, in the same quarter last year. This swing can be attributed to unrealized investment losses resulting from changes in mark-to-market values on held equity investments.
Non-Cash Impairment Charge Affects Financial Performance
Additionally, B. Riley Financial faced a non-cash goodwill and tradename impairment charge of $35.5 million associated with its acquisition of Targus, a renowned manufacturer of laptops and computer accessories. The challenges encountered by Targus in 2023 impacted the company’s bottom line.
Robust Revenue Growth
On a positive note, the financial-services platform witnessed a 48% increase in its top line, reaching $462.3 million. This growth was primarily driven by retail liquidation and higher revenues from financial consulting, communications, and wealth management.