B. Riley Financial (RILY) Stock Soars on Sale of Appraisal Unit to Oaktree Capital
B. Riley Financial, Inc. (RILY) shares are experiencing a significant surge on Monday following the company’s announcement of the sale of its appraisal and valuations unit, Great American, to Oaktree Capital Management. The deal, valued at approximately $386 million, is expected to close in the fourth quarter of 2024, generating excitement among investors.
The Details of the Deal
B. Riley will undergo a pre-closing internal reorganization, contributing all of its interests in Appraisal and Valuation Services, Retail, Wholesale & Industrial Solutions, and Real Estate Advisory businesses to the newly established Great American Holdings, LLC (Great American NewCo). Upon closing, B. Riley will receive a combination of:
* Approximately $203 million in cash
* Class B Preferred Units of Great American NewCo with an initial aggregate liquidation preference of approximately $183 million
* Class A Common Units of NewCo representing approximately 47% of the total outstanding common units
Strategic Rationale for the Sale
Bryant Riley, Co-CEO of B. Riley, expressed his enthusiasm for the partnership with Oaktree Capital, highlighting their impressive track record and reputation as a leading asset manager. He believes that Oaktree’s scale and expertise in alternative investments, combined with Great American Group’s dominance in asset disposition, financial advisory, and real estate advisory services, will create a synergistic partnership, delivering enhanced financial products and services to their clients.
Market Reaction and Stock Performance
According to data from Benzinga Pro, B. Riley shares are climbing on heavy volume following the company’s announcement. Despite the surge, the stock remains below its 50-day moving average of $7.04. This highlights the market’s cautious optimism regarding the deal’s long-term impact on B. Riley’s financial performance.
Investor Considerations
Whether to sell or hold RILY stock ultimately depends on an investor’s individual strategy and risk tolerance. Swing traders may be inclined to sell the stock to lock in a capital gain, while long-term investors might choose to ride out potential market fluctuations, anticipating further share price growth. Similarly, traders seeking to minimize losses may sell if the stock drops by a certain percentage, while long-term investors might view this as an opportunity to buy more shares at a discounted price.
It’s important to consider that shares of B. Riley Financial have lost 89.41% year-to-date, underperforming its historical average annual return of -54.18%. Investors can compare the stock’s movement to its historical performance to determine if this is a typical fluctuation or a potential trading opportunity.
Market dynamics also play a crucial role in investment decisions. The Relative Strength Index (RSI) can be used to gauge whether a stock is overbought or oversold. B. Riley Financial stock currently has an RSI of 30.67, indicating neutral conditions.
For comprehensive analysis tools, charting data, and access to exclusive stock news, investors can explore Benzinga PRO. Try it for free to gain valuable insights and enhance your investment strategies.
RILY Price Action
According to Benzinga Pro, B.Riley shares are up 22.1% at $5.36 at the time of publication on Monday.
