There’s big news, and then there’s Vinco Ventures (NASDAQ:BBIG) and BBIG stock. And in today’s market it’s important to not confuse the two unless investors want to be left holding the bag. Let me explain.
It’s quickly turned into a painful month for many investors. Wall Street appears fully committed to September’s tendency of aping bearish behavior with the S&P 500 shedding as much as 5% this week from its recent all-time-highs.
And BBIG stock hasn’t been immune to the broader market bearishness. Shares are off nearly 25% this month.
Importantly though, don’t make the mistake of blaming Vinco’s current stock woes with today’s go-to finger-pointing towards U.S. debt ceiling concerns or property market jitters tied to a scandal at Chinese real estate giant Evergrande.
The thing that really matters with BBIG stock is Vinco’s status as an ape-driven meme stock. And investors dreaming of owning the next big thing on Wall Street shouldn’t confuse the two.
Owned by the Apes
In a time when Reddit has turned into quite the phenomenon, Vinco Ventures, a once sleepy, unprofitable tech-focused holding company has turned into a distributor of great news and more great news. But this is not a situation where investors are rooting for the underdog.
While I’ll concede press releases and bullish BBIG stock hash tagging could have their basis in fact, I’d warn investors to be extremely wary of what Vinco is really offering. And in our estimation, that’s historical precedent of the most bearish kind.
Bottom-line, if investors think they’re buying into a hot investment offering a blockchain spin-off, some kind of special dividend, social media greatness or gaining a clever toehold into the crypto market’s non-fungible token (NFT) gravy train—that could be true. But profiting from BBIG stock is another matter these days.
Apes who’ve been up to their eyeballs in BBIG stock helping make PR mountains out of molehills as they wage a battle against heavy short-interest approaching 30%, aren’t known for their lasting commitment or changing the long-term trajectory of those companies’ shares. And today that’s a problem.
With Vinco already delivering a second meal for its ape base, it’s our contention the only ‘what’s next’ for BBIG stock is a fairly certain and costly affair for tomorrow’s investors.
BBIG Stock Weekly Price Chart
It would be nice to have something positive to say about BBIG stock. But given how the majority of meme stocks have played out in 2021, a cursory sniff test points towards the conclusion that this time is no different.
What’s more, a more thorough tire-kicking of Vinco Ventures doesn’t support a purchase of shares either.
If like me, investors trust the solid financial sleuthing of InvestorPlace’s Mark Hake, it’s worth mentioning his work turned up more questions to hold off than a convinced reason to own BBIG.
As hinted above, the price action in BBIG stock suggests the smarter apes in the group are already in transit to their next short-squeeze campaign.
With Vinco’s recent high narrowly eclipsing 2018’s record stock price over a spectacular three-week rally of around 400% on massive volume in excess of 1.0 billion shares traded, that feat is unlikely to be repeated.
Today, with shares well off those levels, it’s looking as though a typically more committed bear population is on their way to having the last laugh in BBIG.
Still, if investors trust BBIG stock is something more than what I’m giving it credit as being, i.e. once a meme-always-a-meme stock, I’d strongly suggest relying on an intermediate-dated and slightly out-of-the-money vertical rather than failing technical and crowd support.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.