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  "docId": "019dd923-622c-750b-8b9a-6cf89b81fe9e",
  "docSlug": "377026890e4d",
  "documentTitle": "B. Riley Financial, Inc. (RILY)",
  "authorId": "60_Wolfpack_Research",
  "authorName": "Wolfpack Research",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-02-08 00:00:00",
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  "pageNumber": 13,
  "pageCount": 24,
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  "slideType": "valuation_table",
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  "notes": "Includes a table of goodwill/intangibles and a line chart showing declining operating margins.",
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      "kind": "callout",
      "text": "We think it is misleading for RILY not to write down the intangible assets of these companies as they become more and more obsolete.",
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      "kind": "chart",
      "text": "Comunications Segment Operating Margin 1Q22 - 3Q22",
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      "kind": "metric",
      "text": "operating margin: 2%",
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      "toolName": "Quantification",
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      "kind": "paragraph",
      "text": "RILY admits that these dial-up internet companies are losing value because they are obsolete, yet they have made no adjustments to the value on its balance sheet. In our opinion, RILY ought to impair the goodwill...",
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      "kind": "paragraph",
      "text": "In fact, between just these two purchases, RILY added over $200 in goodwill and intangible assets to its balance sheet. Across its full “communications and other” segment, RILY has added more than $380 million in intangible assets and goodwill...",
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      "kind": "paragraph",
      "text": "We think it is misleading for RILY not to write down the intangible assets of these companies as they become more and more obsolete. We don’t know what sort of valuation methodology the company is using...",
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      "kind": "paragraph",
      "text": "RILY made some changes to its communications segment in 2022 (perhaps because it realized dial-up isn’t the future?) by acquiring a majority of Lingo Management LLC, as well as BullSEye Telecom, and Marconi Wireless. As a result, the margins...",
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      "kind": "quote",
      "text": "A significant portion of UOL’s revenues and profits come from dial-up Internet and DSL access services and related services and advertising revenues. UOL’s dial-up and DSL Internet access pay accounts and revenues have been declining...",
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      "kind": "quote",
      "text": "A significant portion of UOL's revenues and profits come from dial-up Internet and DSL access services and related services and advertising revenues. UOL's dial-up and DSL Internet access pay accounts and revenues have been declining and are expected to continue to decline due to the continued maturation of the market for dial-up and DSL Internet access, competitive pressures in the industry and limited sales efforts — UOL Disclosure",
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      "kind": "table",
      "text": "Communications and Other Goodwill and Intangibles (USD, Thousands)",
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      "matchId": "87c4ae41-e10e-4e2f-8869-0db256a3825c",
      "evidence": "Argues that company is hiding asset impairment to inflate balance sheet value.",
      "confidence": 0.9
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  "arcBeats": [
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      "evidence": "The document provides a solution, or rather, a reason for shorting the company, citing its systemic weakness in equity portfolio and telecom rollup based on obsolete assets.",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": "Resolution",
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  "loops": [
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      "matchId": "e82e8ce9-b936-416a-bdf8-405e4bae75ad",
      "evidence": "The document exposes the contradictions in RILY's investment strategy, including its investment in FAZE and its attempt to grow its assets in Q3 2022.",
      "position": 1,
      "objective": "To expose the contradictions in RILY's investment strategy",
      "structure": "The Symptom (Visible) -> The System (Hidden) -> The Root Cause",
      "confidence": 0.7,
      "description": "Reveal that the visible problem is merely a symptom of a deeper root cause"
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