As was the case in prior months, Vinco Ventures (NASDAQ:BBIG) continues to make big moves. But these recent moves have been in the wrong direction. Instead of going bananas for BBIG, as they were doing earlier this year, investors instead have sold out of the stock in droves.
Trading for as much as $12.49 per share in September, it’s since dropped to around $2.85 per share. However, while many will see this as a warning sign to stay away, that may not exactly be the best course of action here. Why? Although its stock price has made some dramatic changes, the underlying “story” with Vinco is largely unchanged.
The company isn’t without fault. It’s uncertain whether its early-stage companies will continue to flourish. These risks are compounded by its complex corporate structure, which adds a thick layer of uncertainty.
But when you take into account its key assets, and its long-term potential with them? For investors looking for high-risk, high-potential return plays, this is still one of the more interesting situations out there.
Even as the market sours on BBIG stock, take a look for yourself. You too will see that Vinco Ventures presents an opportunity worth considering.
BBIG Stock at a Glance
In case you haven’t followed the situation here with Vinco Ventures, here’s a brief rundown. Vinco is a digital holding company that can be best broken down into two parts. First, there’s its wholly-owned Cryptyde unit, which it plans to spin off early next year. This unit consists primarily of its non-fungible token (NFT) business, plus other holdings in the crypto mining and metaverse spaces.
Second, and of most importance to the bull case for BBIG stock, is the investments it holds through ZVV, its 50/50 joint venture with ZASH Global. These include an 80% stake in Lomotif, plus full ownership of AdRizer. Lomotif is a video sharing site, similar to TikTok. Meanwhile AdRizer is a digital advertising platform, which the company plans to use to monetize Lomotif.
As I discussed in my last Vinco article, there is a lot of potential with both of these early stage companies. The company is aggressively promoting Lomotif, not only in the U.S. but also India. With TikTok banned in India, Lomotif could be a major video-sharing platform there. AdRizer, generating tens of millions in annual sales and growing rapidly, could also become worth many times what ZVV paid for it.
In short, it’s unfair to write this off as an “all hype, no substance” meme stock as some critics have done. I will admit though, that this is still a situation high in risk, uncertainty and volatility.
Don’t Assume BBIG Stock Has Found its Floor
Changing hands just under $3 per share today, it may seem like BBIG stock is finally bottoming out. But while I’m optimistic the company has a shot of successfully scaling up Lomotif and AdRizer, success is far from guaranteed.
In the case of Lomotif, it still needs to execute its expansion plans. If those plans succeed, it has a shot of becoming one of the world’s most widely used video sharing apps.
If it fails to gain widespread usage? Expect it to join the long list of now-defunct video sharing apps.
There isn’t much risk of the already-established AdRizer fizzling out. Yet it could still see growth slow down much earlier than expected.
Along with the risky nature of the company’s main operating assets, there’s another issue: its complicated corporate structure. Not only does it hold its most valuable assets through the ZVV venture with ZASH Global; both Vinco and ZASH share the same management team. This makes sense, considering both companies had announced merger plans. However, the two companies have still not merged. It’s unclear why these two companies have done everything but combine into one straightforward entity.
To top things off, the company’s use of warrants also makes analysis challenging. A lot of these warrants have been exercised since Sep. 30, the end date of its most recent quarterly 10-Q filing. It will not be until it files its ext 10-Q that we’ll have an understanding of how much shareholder dilution has happened, and what the company (in terms of cash infusion) has received in exchange for issuing these new shares.
The Final Verdict On Vinco Ventures
Earning a “B” rating in Portfolio Grader, this is a high-risk stock that will likely stay volatile. Any delays/hiccups in its ramping up of Lomotif could cause shares to move lower before they move higher once again. With this, more risk-averse investors may want to stay away.
However, if you’re looking for a risky play that could experience a tremendous rebound as its path to success becomes more clear, BBIG stock may be right up your alley.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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