If you want to profit and get it easily, now is the right time to sell your shares in Vinco Ventures (NASDAQ:BBIG). BBIG stock recently became an issue of discussion on Reddit forums when rumors circulated that there might be another short squeeze in the offing. But it’s important to look at everything the company is doing.
Last year, Zash Global Media picked up Singapore-based Lomotif, which specializes in music video sharing. After that, a reverse merger took place. And we now have Vinco Ventures trading on the Nasdaq, a company looking to position itself as a pre-eminent social media video production company to rival TikTok.
However, that is only one part of its ambitions since it happens to have its fingers in several pies, most prominently in the crypto space. Therefore, analyzing the company can become tough.
On top of this, none of the company’s ventures are successful. The most interesting part of this company is its ZASH unit. They’ve bought other businesses, such as Lomotif, a short-form video platform that is looking to make it big in India, which has banned the Chinese application TikTok, creating a gap in the market.
Apart from this, the company is spinning off its cryptocurrency business under the name of Cryptyde and making it a separate entity. The company had to issue more shares to finance this, leading to dilution once again.
Therefore, all things considered, it’s a precarious time for the company. Hence, BBIG stock is not a buy right now.
Lomotif Is Not the Next TikTok
As per Farnsworth, Zash has 100 million active users worldwide. More importantly, Lomotif has 41 million active users in India, an increasingly important country to its future ambitions.
India has banned numerous Chinese apps following the military conflict between Indian and Chinese soldiers in the Ladakh area. TikTok was among these apps. As a result of this ban, estimates for total losses for TikTok are over $6 billion.
Other companies have moved in aggressively to take advantage. It’s unclear whether Reels, a feature for short-form videos inside Instagram, will be enough to cover the gap.
Meanwhile, Lomotif’s India expansion plans are in full swing thanks to their partnership with major media conglomerate Viacom18. They have also inked an agreement with Lionsgate Play for another venture, details of which are scant.
Understandably, all of this is leading to significant hype for the company. However, it’s important to take things into context. As InvestorPlace’s Ian Bezek wrote, the app does not rank in the top “Photo and Video” category on Apple’s (NASDAQ:AAPL) store and is No. 130 among all apps. So it has a limited appeal so far. He also makes a great point about the issues of having Ted Farnsworth, the brains behind the failed and defunct MoviePass, at the helm of this enterprise.
Finally, Tiktok is working aggressively to get its app back online in India. India’s relationship with TikTok is complicated. However, many Indians want it back since it’s an important revenue stream for local content creators.
Cryptyde Is Not a Panacea for Vinco Ventures’ Woes
Last year, Vinco Ventures announced that they would spin off Cryptyde as a separate entity on the Nasdaq, with BBIG shareholders receiving shares in the new entity.
Cryptyde’s strategy is to invest in and create new Web 3.0 products and high-growth industries such as NFTs, music and crypto mining.
To give you a bit of background, Web 3.0 refers to an expected third generation of web technologies, characterized by a transition from using static, centralized content delivery websites to using more interactive and decentralized technologies. However, cryptos are a downtrend for several months, and the price is not stabilizing. And BBIG is issuing $42 million in convertible debt and equity to finance the deal. Therefore, this might not be the slam dunk some BBIG stock bulls expect.
BBIG Stock: Time Is Ripe to Take Profits
Meme stock frenzy is far from over. There are several examples just in the last few weeks that illustrate that Reddit investors can still pull their weight. This is why, when analyzing a former meme stock, you have to be cautious.
However, there are so many “what ifs” regarding the company’s portfolio. Therefore, it’s hard to give it a buy rating. Your best course of action should be to sell shares and profit from the recent upswing.
On the publication date, Faizan Farooque 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.
