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BBIG Stock Heats Up as Lawmakers Tackle TikTok

  • Shares of business development firm Vinco Ventures (BBIG) are up about 1.5% in Friday afternoon trading.
  • Lawmakers piled pressure on Vinco rival ByteDance, which owns popular video-sharing platform TikTok.
  • Bulls are likely bidding up BBIG stock for cynical reasons.
BBIG stock - BBIG Stock Heats Up as Lawmakers Tackle TikTok

Source: shutterstock.com / Postmodern Studio

While the confusing nature of Vinco Ventures (NASDAQ:BBIG) has prevented significant mainstream interest in BBIG stock, the company’s flagship product Lomotif may soon receive a cynical upside catalyst. Lomotif competes with TikTok, the popular short form video-sharing platform. However, TikTok’s China-headquartered parent firm ByteDance has been courting significant political pressure. Recently, lawmakers demanded greater transparency regarding data collection and usage, which may play into Vinco’s hands.

Earlier today, The Hill reporter Chris Mills Rodrigo revealed that two high ranking House Republicans are asking TikTok for more information about the access that ByteDance’s China-based employees have to American data. Representatives James Comer and Cathy McMorris Rodgers wrote a letter to TikTok CEO Shou Zi Chew, expressing concerns about data management and security practices.

The issue focuses on suspicions that ByteDance has not been forthcoming about leveraging its popular TikTok platform — which is rapidly approaching the one-billion-user mark — to collect data on U.S.-based users.

Per a write-up from the New York Times, last month:

BuzzFeed News reported that ByteDance employees in China had gained access to the app’s U.S. data as recently as this year and that employees were struggling to cordon off information collected by the app.

Naturally, the latest scrutiny over TikTok has incredibly positive (albeit cynical) implications for BBIG stock. Vinco’s Zash ecosystem — of which Lomotif is a part — features a global active user count of 100 million, which while impressive pales in comparison to TikTok’s massive influence.

BBIG Stock and the National Security Angle

Although the political arena already imposes significant headwinds on ByteDance and TikTok, burgeoning awareness of the Chinese-owned platform’s threats to national security may be yet another upside catalyst for BBIG stock.

According to the MilitaryTimes, TikTok poses significant risks since servicemembers often use the video-sharing app. In recent testimony to the House Oversight Committee, the Federal Communications Commission’s Brendan Carr warned about the possibility of unknowingly disseminating compromising information.

“With TikTok, this is a device right in your pocket. It’s going inside the military installation, looking at location data, which can give people information on troop movements,” Carr said. “There’s a range of ways that that sensitive data going back to Beijing with their sophisticated [artificial intelligence] can ultimately be used to harm U.S. national security.”

Late last month, TikTok sent a letter to U.S. senators “acknowledging that employees outside the country could see data on U.S. users,” per a CNBC report. However, the social media firm said in the letter that it is working with Oracle (NYSE:ORCL) on more advanced data security tools. Since then, TikTok has reiterated that “100% of US user traffic is being routed to Oracle Cloud Infrastructure.”

Why It Matters

For speculative investors, BBIG stock may be getting increasingly more attractive. Irrespective of TikTok’s defense of its reputation, the reality is that longstanding tensions between the U.S. and China will not easily fade. Further, negative views about the country are not just exclusive to the U.S. but are a global phenomenon.

Of course, BBIG stock is no slam dunk. Primarily, competitive concerns in the broader social media space will weigh heavily on any sector player. Nevertheless, massive pressure on a key rival invariably sparks at least some downwind benefits.

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 InvestorPlace.com 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.


Article printed from InvestorPlace Media, https://investorplace.com/2022/07/bbig-stock-heats-up-as-lawmakers-tackle-tiktok/.

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