It’s been an interesting – and dizzying – few months for Vinco Ventures (NASDAQ:BBIG). The company has gone through so many changes since January 2020 that you’d barely recognize it. In fact, other than having the same name and carrying the BBIG stock ticker, there’s not a lot of consistency with Vinco Ventures.
When you’ve got a company making this many changes, you’re going to see it reflected in the stock price. BBIG stock bounced in and out of penny stock territory over the past few months, rising to a high of $12.49 in September. Just since the start of the year, BBIG stock shot up more than 130% before taking a 40% plunge.
Today, betting on Vinco Ventures means embracing it as a cryptocurrency play. Whether or not this latest venture will prove profitable for investors is very much up in the air.
What is Vinco Ventures, Anyway?
The best way you could describe Vinco Ventures a year ago would be to call it a product research company. It made headlines in January 2020 when it announced a reverse merger with Zash Global Media and Entertainment.
Zash became the controlling company in the transaction, and the new firm plans to change its name to ZASH. For now, though, it continues to go by Vinco Ventures and the BBIG stock symbol.
The combined company finalized a deal in July to become the owner of short-form video platform Lomotif. The company hopes that Lomotif will be able to compete with the popular Chinese social media platform TikTok.
Zash Global Media was founded by Ted Farnsworth, the former chairman of MoviePass. In case you don’t remember MoviePass, it was an all-you-can watch movie ticket subscription. If that sounds too good to be true that’s because it absolutely was. MoviePass shut down in September 2019 and filed for Chapter 7 bankruptcy protection a few months later.
So, you’ll understand if I don’t have a ton of confidence in Farnsworth.
Vinco Ventures Becomes a Crypto Play
These days, Vinco Ventures is a holdings company that has its fingers in several consumer and digital marketing brands. It also has interests in non-fungible tokens and cryptocurrency, which is what has been drawing plenty of attention to BBIG stock lately.
Vinco Ventures has been looking to spin off blockchain technology company Cryptyde, which will trade on the Nasdaq under the ticker symbol TYDE. And it finally seems to be happening. Vinco announced last week that it filed with the U.S. Securities and Exchange Commission. A few days later, it said it had “entered into definitive agreements for a debt and common equity raise of $42 million.” For every 10 shares of BBIG stock, shareholders will get one share of TYDE.
As my InvestorPlace colleague Eddie Pan points out, Cryptyde plans on acquiring and creating Web 3.0 products and targeting consumer-facing Web 3.0 markets like video games, music and art. It will also offer Bitcoin mining equipment and co-location services.
Cryptyde CEO Brian McFadden said the $42 million will allow Cryptyde to scale quickly without affecting shareholder value. “We are focused on executing on our vision to become a leader in the blockchain and web3 space. We are actively pursuing growth opportunities and looking to collaborate with partners who can enhance our future offerings, while striving to develop a world-class organization for our stakeholders,” McFadden said.
The Bottom Line on BBIG Stock
Let’s be honest, Vinco Ventures is all over the place. It’s grasping at disruptive technologies in hopes of striking gold (or the crypto equivalent, if you will).
Betting today on BBIG stock is a huge gamble. Granted, it has some supporters. But in my book, it takes a measure of faith to believe that Vinco Ventures won’t end up like another MoviePass.
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On the date of publication, Patrick Sanders did not hold (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.
Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders.