When it comes to Vinco Ventures (NASDAQ:BBIG) stock, investors continue to dig a larger hole for themselves rather than crafting a successful “mining operation” in the shares.
Let me explain.
But first, let’s take a little trip back on memory lane to better understand how BBIG stock landed where it is today. It’s hard to keep up with the steady load of promising reports assuring us what Vinco Ventures is up to these days. But lately, the sound bites have been falling on deaf ears.
Unless you’re an insider or the fleetest of fast money traders, investors have been clearly better off failing to take notice. And that sad story is unlikely to change with Vinco Ventures’ stock.
BBIG Stock Takes an Ugly Turn
In fact, BBIG stock is down 20% since I last warned readers in late September not to be lured by the “appealing” headlines. Some of these enticing news items include a promised blockchain spinoff, BBIG’s toehold into non-fungible token (NFT) territory, a move into short-form social media and buzz surrounding a special dividend.
It has been ugly to say the least. But that’s not the worst of it. Those that sank their teeth into BBIG’s PR bait as recently as early September could be reeling upwards of 65%.
So, what gives? What’s behind the pressure in Vinco shares?
It’s certainly not the broader market, which some may have wrongly pointed fingers at during September’s brief seasonal ode to fear and loathing. After all, the S&P 500 sits just off record highs today after rebounding roughly 8% over the past month. Yet BBIG stock remains near its bear market low.
You want the truth? It’s probably staring investors in the face. BBIG’s strongest feat is the production of PR announcing cool-sounding business pivots and forays into growth markets.
To be fair, BBIG is a tech holding company. That’s what they do, right? But success has proven elusive during its few years as a publicly traded entity.
And that makes it all the more puzzling why investors might trust the company is any different today. Vinco’s chances in highly competitive markets — no matter the amount of spin-off plans, mergers, management shake-ups or moves into the latest and greatest markets — don’t really look much better than before.
Vinco’s Weekly Price Chart Tells a Dark Tale
Source: Charts by TradingView
Monday’s latest news is that Vinco’s Cryptyde spin-off is launching a joint venture to simplify consumer ownership of Bitcoin (CCC:BTC-USD) mining equipment. The information sounds bullish, but BBIG stock’s 0% finish on the session says otherwise.
And Tuesday’s 7% decline suggests Vinco’s strength as a meme stock has dwindled. It no longer appears able to challenge the large bearish short interest. What’s more, when looking at the weekly price chart, not only is the weakness unsurprising, it also appears to be far from over.
The thing is after three larger bear raids this year (labeled on weekly chart above), the price action in BBIG stock is showing sure signs of fatigue. Bullish Redditors are losing their breath. Meanwhile, regular investors are starting to shy away from the elevated risk in Vinco Ventures.
Now, challenging Vinco’s bears looks like a foolish choice. That’s especially true after October’s third failed squeeze attempt and the subsequent massive — and bearish — two candlestick reversal pattern on the weekly chart.
Ultimately, readers can choose trust and use information off and/or on the BBIG stock price chart to their advantage. But it’s obvious that the chart action is showing an ugly picture. As such, I suggest investors avoid shares. Even the Redditors are waking up now.
On the date of publication, Chris Tyler holds long positions (either directly or indirectly) in Grayscale Bitcoin Trust (GBTC). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.