As an early-stage company, sentiment for Vinco Ventures (NASDAQ:BBIG) can turn on a dime. That’s what we’ve seen play out for BBIG stock in recent weeks. A delay in the spinoff of its Cryptyde non-fungible token (NFT) unit has depressed enthusiasm for shares.
Trading for around $3.25 per share a month ago, this digital holding company currently trades for just over $2 per share, not too far above its 52-week low. Yet, while this is bad news for existing investors, if you haven’t dived in so far, this may work to your advantage.
Why? Right now, all the focus is on Cryptyde. However, that’s not the most interesting thing about this stock. Rather, like I’ve argued previously, the company’s non-NFT/crypto ventures have a lot of potential. Progress with this aspect of the business may be what drives its next spike in price.
|BBIG||Vinco Ventures, Inc.||$2.11|
BBIG Stock, Cryptyde, and its True Catalyst
While it is not as volatile as it was in 2021, BBIG shares have zigzagged a bit since the start of 2022. Most of the buzz has been due to the aforementioned planned spinoff of Cryptyde.
Many speculators may have been of the view that spinning off this segment would fuel a short-squeeze for BBIG stock. A large percentage of its free float (17.35%) has been sold short. This may explain why delays with the spinoff have resulted in these same speculators going from very bullish to very bearish.
That is, going from bidding it up briefly in January and briefly in March, to bidding it lower, as seen since the last announced delay on May 25. Investors who chased this during these rallies have unfortunately been burned in the process. Even so, that’s not to say that more delays, or a scrapping of its spinoff plans entirely, means “game over” for Vinco as an investment opportunity.
Again, it’s something else that, if it happens, is what could enable this former “hot stock” to make a comeback. This would be progress with its non-crypto ventures, such as video sharing app Lomotif and digital ad firm AdRizer.
What Success With Vinco’s Other Ventures Could Mean
Assuming further delays with spinning off Cryptyde, BBIG stock could remain depressed in the near term. Even if the spinoff winds up happening within the next few months, the stock could still struggle.
NFT and crypto isn’t as hot as it once was. This may explain why today’s investors don’t see spinning off Cryptyde as something that will unlock value for Vinco shareholders. On the other hand, while this may not be just around the corner, the next major news with Lomotif, and to lesser extent, AdRizer, may be what fuels the stock’s next rally.
The company, along with its 50/50 partner in the venture, ZASH Global, has been at work to drive user growth. For instance, it has found success attracting new users through the live streaming of exclusive music festivals and events. Its live-streaming of a music festival back in March alone resulted in 7.2 million active user registrations. Its number of active users now totals 31 million.
While expanding its user base, the company is also working to monetize it. That’s where AdRizer comes in. Vinco bought this artificial intelligence-powered programmatic advertising company in order to maximize its Lomotif monetization efforts.
The Verdict on BBIG Stock
Vinco Ventures stock currently earns a “B” rating in my Portfolio Grader. It should be noted that this isn’t a stock for everybody. While it has a lot of potential, there’s a lot of risk, as well. Future upside doesn’t hinge on the Cryptyde spinoff.
But if it fails to grow Lomotif’s revenue like it has grown the video sharing platform’s user base, it will have a hard time making its way back to higher prices. Still, I wouldn’t take this high risk to mean it has a low chance of finding success with this venture. Vinco has a war chest totaling $187.6 million. This cash could go a long way in helping take Lomotif to the next level.
If you can stomach the risk, now when it’s out of favor may be an opportune time to consider making BBIG stock a speculative buy.
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.