Babcock & Wilcox’s (BW) Much Hyped $2.4 Billion Deal Appears to Be with an Opaque RILY Backed Corp; And APLD Has Already Contradicted Disclosures About the Deal

We are short Babcock & Wilcox Enterprises (BW), a stock that is up ~75% from March 3rd, based on a press release with a headline claiming a $2.4 billion deal to provide power-generating boilers for APLD—but the devil is in the details, or in this case in Santa Monica at the headquarters of BW’s largest shareholder, BRC Group Holdings (RILY). BW’s counterparty is not APLD, but a newly minted entity backed by RILY called Base Electron. Base Electron has the same address as RILY’s headquarters and Bryant Riley is a director. BW describes Base Electron as an APLD “subsidiary,” but APLD contradicts this by describing it as an independent company and claims to only have a 10% interest in Base Electron. Someone is wrong here, our money is on the company who RILY has “significant influence” over, BW.

BW didn’t mention RILY’s backing for Base Electron in its press release for the deal that dramatically increased the value of RILY’s stake in BW, and that is no surprise considering the glaring conflict of interest. RILY has ample reason to over-hype this deal from behind the scenes, and we think the ultimate purpose of this deal may be to provide exit liquidity for RILY, as presaged by its CEO Bryant Riley’s sale of $10.4 million in BW stock at $9.00 per share on February 11th, 2026, to alleviate his debt burden.

APLD’s disclosures undercut the deal’s credibility. The timeline keeps shifting, and APLD makes no promises to deploy these power-generating boilers on any of its projects. Our research into local municipal meetings in Louisiana and South Dakota indicates APLD will simply draw on power from the grid for these upcoming projects, meaning APLD does not appear to need BW for any projects currently in development.

Critically, while APLD has guaranteed Base Electron's obligations to BW, that guarantee dissolves the moment Base Electron lists on a public exchange or receives proceeds of $50 million in a “financing transaction.” We think this guarantee is as thin as the proverbial napkin memorializing some backroom deal that Bryant Riley could easily spin up to let his old employee and pal Wes Cummins off the hook without paying a dime. Backroom deals appear to be Bryant Riley’s specialty; he is still dealing with the fallout of the backroom deal he struck with the fraudster Brian Kahn to take FRG private.