I mean options signals, not stock signals! There is a big difference.. I get every 15 minutes at least 10 good signals for different strikes of RILY, and this for several weeks now... I haven't traded it myself yet simply b/c I'm already fully invested...
I wrote this in Dec/Jan...Let's see your train of thought. "How could you go wrong with a 9.6% two year corporate bond!! It speaks for itself..."
There are other threads on this, but I will nevertheless add my take... The claims advanced by short sellers are all hype. There is zero evidence of fraud or misconduct at Riley and the company they acquired, FRG. If you look carefully at what has been reported, it's all innuendo, someone quoting someone who claims to have knowledge of the inside workings, but remains anonymous, and some real bullshit that is being presented as news but is actually nothing more than a paid press release from a law firm that claims to be investigating Riley for a potential shareholder derivative action. But no case has been filed, because there is no evidence. Of anything. But the short sellers have some resources, and they are playing dirty, and the price of the common stock may remain depressed for quite some time. Preferred stock may also suffer in price, but I think it highly unlikely that dividends on preferreds will be cut or suspended. They can't do that without first eliminating the common dividend. The real debate around here is about their debt securities. They've got a lot of baby bonds that look and trade like preferred stock, but they are debt instruments. And I think the probability of a default is near zero. But the prices have suffered. That means many of these exchange traded bonds are a real bargain. RILYM matures in one year, and it is trading at around $20. The interest rate is 6.375%. YTM is close to 30%. It's insane. They are not going to default on those bonds.
What does this chart of all the RILY and RILYx tickers tell us? It seems RILYO performed best Ie. the best of the worst Code: RILY|B. Riley Financial, Inc. - Common Stock|G|N|N|100|N|N RILYG|B. Riley Financial, Inc. - 5.00% Senior Notes due 2026|G|N|N|100|N|N RILYK|B. Riley Financial, Inc. - 5.50% Senior Notes Due 2026|G|N|N|100|N|N RILYL|B. Riley Financial, Inc. - Depositary Shares, each representing a 1/1000th fractional interest in a share of Series B Cumulative Perpetual Preferred Stock|G|N|N|100|N|N RILYM|B. Riley Financial, Inc. - 6.375% Senior Notes due 2025|G|N|N|100|N|N RILYN|B. Riley Financial, Inc. - 6.50% Senior Notes Due 2026|G|N|N|100|N|N RILYO|B. Riley Financial, Inc. - 6.75% Senior Notes due 2024|G|N|N|100|N|N RILYP|B. Riley Financial, Inc. - Depositary Shares, each representing a 1/1000th fractional interest in a share of Series A Cumulative Perpetual Preferred Stock|G|N|N|100|N|N RILYT|B. Riley Financial, Inc. - 6.00% Senior Notes Due 2028|G|N|N|100|N|N RILYZ|B. Riley Financial, Inc. - 5.25% Senior Notes due 2028|G|N|N|100|N|N
RILYO matures in three months. It is trading at the par value. So apparently, "the market" does not believe there is any significant possibility of default on this particular issue...
@BMK, what are these tickers named "Senior Notes" about? Are they corporate bonds? And where from do you get that RILYO matures in 3 months? Is that coded somewhere? The list above says just "2024". And what does it mean "it trades at the par value"? Sorry my ignorance, I don't know bonds, and I know only normal stock/ETF/index tickers, not such exotic tickers meaning something different than these listed Update: found this site explaining "par value" etc: https://corporatefinanceinstitute.com/resources/fixed-income/at-par/
@Quanto As a practical matter, in this context, the word note is synonymous with the word bond. Senior refers to where the notes sit in the capital stack, i.e., whether there are other debt securities that have priority when it comes to making payments of interest or principal. Some notes and bonds are identified as junior or subordinated. And some are identified as secured or unsecured. But they are debt instruments. They are not equity securities. In a bankruptcy, they have priority over common stock and preferred stock. The full quote screen in a brokerage account should show you the maturity date. Par value refers to the face value, or principal value, of the bond. Regular corporate bonds typically have a par value of $1,000.00. Baby bonds, or exchange traded bonds, typically have a par value of $25.00. In the case of RILYM, you can buy these notes today for about $21, and when they mature on 02/28/25, you will receive $25.00--assuming the company does not default. And over the next year, you will receive quarterly interest, and the interest rate is paid on the par value of $25--not on the price you paid for the note. The Schwab quote screen labels these notes with the abbreviation PFD, which implies that they are preferred stock. This is simply not accurate. It is a flaw in Schwab's platform, and Schwab is not the only broker that does this. These things trade live on an exchange--usually NYSE or NASDAQ--and in many ways they behave like a preferred stock. But legally they are bonds. They have a maturity date, and on that date, you get paid the principal, like any other bond. And in a bankruptcy, they will behave like bonds, because that is what they are. They are not preferred stock.
@BMK, thank you very much for the excellent explanation. I just learned some new things that seem indeed very important to know in this field...
One of the best sources of information for these securities is www.quantumonline.com Most of the retail broker platforms do not have any way to screen or search for exchange-traded bonds. I did not know anything about them until a few years ago. Here's a Forbes article that is over 20 years old. Some of the information is a bit stale, but it's still interesting and worth a look. https://www.forbes.com/2002/01/15/0115soapbox.html?sh=59b27ad474f4