I would have bet Vinco Ventures (NASDAQ;BBIG) stock would not have been on a bingo card for stocks that would be positive in January 2022.
Yet here we are. BBIG stock is up 26% this month.
That’s where the mystery starts. Because there’s no new news moving the stock higher. It announced late last year that it was spinning off its Cryptyde business unit.
As its name suggests, Cyrptyde is a crypto-centric business. Crypto dovetails with the company’s exposure to emerging digital technologies such as non-fungible tokens (NFTs).
Spinning off Cryptyde, which will eventually trade under the ticker TYDE, gives investors exposure to the crypto market while retaining their shares in BBIG stock. So where does this leave Vinco Ventures?
To truly understand this, it helps to understand that Vinco Ventures will be merging with its ZASH business unit.
At some point, Vinco Ventures will simply be ZASH. In fact, the operating structure of the company suggests it already is.
ZASH, along with the company’s joint venture with ZVV owns two companies: AdRizer and Lomotif. This places the company squarely into two sectors: digital advertising and interactive digital content.
An Alternative to TikTok?
I think I’ve mentioned before that I find the “the next (fill in name of athlete)” comparisons tiresome.
I understand why analysts do it. They want to give fans a frame of reference. But at a certain point, the player has to pass the eye test all on their own. And then they become the first whoever without having to live up to undue hype.
Vinco Ventures is being suggested as (sort of) the next TikTok. It’s not. But Lomotif is in the business of producing short-form interactive video content. In fact, that’s one of the most promising avenues for growth that the company has going.
There’s more to Vinco Ventures than Lomotif, and that’s where the opportunity may be better.
That’s because AdRizer gives the company exposure to digital advertising. And that means that AdRizer gives Lomotif a way to monetize its traffic.
Plus, the company is expected to expand into areas such as augmented reality (AR)/virtual reality (VR) live streaming. Like I said there’s a lot to like about Vinco Ventures. But this is likely to be a very competitive sector. You need to keep that in mind as well.
BBIG Stock May Pay Off
I may not be doing the best job of describing the structure, and therefore the opportunity, in Vinco Ventures and, by extension, BBIG stock. I do believe there may be an opportunity. But we’re still in the early innings here.
My best advice to you regarding Vinco Ventures is to know what you own then wait for the right price. Right now, that would seem to be somewhere below the $3 level, but I’ll let you decide.
Keep in mind Vinco Ventures is not yet profitable and revenue at this point is minimal. The volatile price action in BBIG stock is being driven by retail investors. The short squeeze strategy worked once. There’s nothing to say it couldn’t work again.
But that’s not what you’re buying. And as long as short interest remains above 20%, it’s a reason to stay away. At least at an elevated price.
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On the date of publication, Chris Markoch 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.
Chris Markoch is a freelance financial copywriter who has been covering the market for eight years. He has been writing for InvestorPlace since 2019.