Jefferies Financial Group faces a critical juncture as its shares have plunged nearly 50% since September, partly due to exposure to the collapse of US car parts maker First Brands. The last remaining large, pure-play US investment bank may soon need to decide whether to sell to Japan's Sumitomo Mitsui Financial Group, which already holds a stake approaching 20%.

Jefferies has long occupied an unusual position in Wall Street's landscape. Unlike peers such as Bear Stearns, Merrill Lynch, and Lehman Brothers that failed or merged during the financial crisis, Jefferies chose to remain a capital markets-funded firm rather than convert to a bank holding company. This strategy largely succeeded in recent years but now faces headwinds from higher interest rates and soured legacy investments.

The bank's sprawling business became evident through its relationship with First Brands, where it served as adviser, led a failed leveraged loan refinancing, and held stakes through Leucadia Asset Management. With under $100 billion in assets compared to rivals' trillion-dollar balance sheets, Jefferies struggles to compete with giants like Goldman Sachs and Morgan Stanley while commanding lower valuations than elite boutiques like Evercore.