(Reuters) – Shares of B. Riley Financial fell more than 27 percent in late trading on Thursday, extending losses for a sixth straight session to their lowest level in a decade on lingering concerns about a second-quarter loss and regulatory scrutiny.
Shares have taken a hit this week after the Los Angeles-based investment bank also delayed filing its regulatory reports.
Shares plunged 52% on Monday after B. Riley warned of a loss of between $435 million and $475 million for the three months ended in June, compared with a profit of $44 million a year earlier.
The bank also warned it could report a writedown of between $330 million and $370 million in the quarter related to its investment in Vitamin Shoppe's parent company, Franchise Group (NASDAQ:VITAMINS). The deal had drawn scrutiny from shareholders and regulators.
This was the third time the bank has delayed its filings with the Securities and Exchange Commission (SEC) this year. B. Riley said the delay was due to delays related to finalizing valuations of certain loans and investments.
The company's shares, which have been suspended several times for volatility, closed at $5.04, their lowest level since May 2014.
The stock, which has fallen more than 76% so far this year, was among the top 10 losers on the index on Thursday. The drop has wiped about $360 million off the bank's market value so far this week.
The company did not immediately offer comment on the stock's decline.
About 78% of the float is sold short, which is close to the highest level in at least five years, according to estimates by ORTEX Technologies.
Short interest picked up significantly beginning in September, reaching over 20% of the float, and rose sharply to a peak in March of around 80% of the float.
Short interest fell below 50% in mid-June but rose sharply as the stock fell.
In July, B. Riley and its chief executive were served with SEC subpoenas, primarily related to the bank's dealings with former Franchise CEO Brian Kahn.
Bloomberg News reported in November that Kahn was a co-conspirator in a securities fraud involving Prophecy Asset Management.
Kahn has denied the allegations made in the report, saying he never knew Prophecy Asset was allegedly defrauding investors.
An external investigation and internal review earlier this year cleared B. Riley of any wrongdoing.
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