BBIG Stock Falls 5% on the Cryptyde Spinoff Distribution Date

  • The long-awaited distribution date for Vinco Ventures (BBIG) is here as the company spins off its Cryptyde (TYDEV) business.
  • Shareholders of record on May 18 are entitled to receive shares of TYDEV on a 10:1 basis relative to BBIG stock.
  • Despite the much-anticipated stock dividend, BBIG dropped around 8% before somewhat paring losses in the afternoon hours.
BBIG stock - BBIG Stock Falls 5% on the Cryptyde Spinoff Distribution Date

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Vinco Ventures (NASDAQ:BBIG) has never failed to attract a core following of loyal investors. Though BBIG stock has historically been choppy, shareholders were looking forward to today, the announced distribution date for blockchain and connectivity-focused Cryptyde (NASDAQ:TYDEV).

According to Vinco’s press release, BBIG shareholders of record on May 18, 2022 are entitled to receive one share of TYDEV for every 10 shares of BBIG owned. Investors should note that Cryptyde will eventually trade under the ticker symbol TYDE. The press release did not clearly articulate when this change will occur since as of this writing, Cryptyde still trades under TYDEV.

Nevertheless, the big day is finally here. Previously, Vinco investors expected the share dividend to hit May 27. Still, even with the Cryptyde distribution, it doesn’t change the wildness of Vinco, with shares down 25% on a year-to-date basis.

In addition, BBIG stock slipped substantially on the distribution, at one point shedding over 8% before paring back losses to around 5% in the afternoon hours.

What the Future Holds for TYDE and BBIG Stock

To be sure, the decline in BBIG stock isn’t entirely surprising. Typically, when shares go ex-dividend, the market corrects their valuation to basically reflect the fact that new shareholders will not receive the payout, be it cash or equity based.

Moving forward, Vinco and Cryptyde will now tackle the market as separate entities. For the latter, the spun-off enterprise will utilize Vinco’s acquisition-based business model, specifically focusing on blockchain, cryptocurrency and Web 3.0 opportunities that are tied to consumer-facing industries. Interestingly, Cryptyde will also provide crypto mining equipment.

For the former enterprise, management will presumably continue expanding its development of digital media and content technologies. As InvestorPlace Assistant Financial News Writer Shrey Dua noted, Vinco in some ways acts like a special purpose acquisition company (SPAC), seeking out selective opportunities for development and value enhancement.

An Avenue for Speculators

The main issue for BBIG stock is its enigmatic profile. It seems market participants don’t know what to do with shares given that they tend to gyrate with little rhyme or reason. For instance, while BBIG is down double digits this year, at one point, it was up 100%.

Furthermore, the Cryptyde business appeared on the scene at a bad time for cryptocurrencies. Unless the broader economy improves – and takes cryptos up with it – it’s hard to justify BBIG or TYDE for anyone who’s not a speculator.

On the date of publication, Josh Enomoto 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 Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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