Vinco Ventures (NASDAQ:BBIG) is trending, and BBIG stock is down about 8% in early trading. The company disclosed that it had received a “non-compliance” letter from the Nasdaq exchange and announced that it had appointed three co-CEOs.
BBIG has an 80% stake in “video sharing site Lomotif,” which is viewed by many as a direct competitor to TikTok.
The Non-Compliance Letter
Vinco stated in a press release issued last night that it had violated a Nasdaq rule requiring it to disclose its second-quarter financial results, through the U.S. Securities and Exchange Commission’s (SEC) 10Q form, by Aug. 22.
According to the company, it will be given until Oct. 17 “to submit a plan to regain compliance with the requirement.” At that point, Nasdaq could grant Vinco until Feb. 13, 2023, to disclose its Q2 financial results.
Vinco reported that it “intends to file the Form 10-Q as promptly as possible in order to regain compliance with the Rule and will submit a plan of compliance as required by the Rule.”
BBIG Stock: Management Changes
Vinco disclosed that it had named three individuals –Ross Miller, John Colucci, and Lisa King — as co-CEOs.
Miller had been CEO of BKB Global, which is owned by DirectTV. He was also “Senior Vice President and General Counsel of Paragon Gaming, an international casino gaming company based in Las Vegas.” Meanwhile, Colucci was “the Vice President” of a marketing company for 11 years, while King was previously the CEO of both Vinco and its parent company, ZASH, which owns Lomotif.
Court Orders
On Aug. 5, a Nevada judge issued a temporary restraining order preventing members of the Farnsworth Group from portraying themselves as owners of Cinco, “acting on its behalf in any capacity,” controlling the company, or utilizing its equipment. Theodore Farnsworth was a co-founder of ZASH, and he and a number of his associates became members of Vinco’s management team.
The Aug. 5 court order was issued after Vinco’s board, on July 24, fired Theodore Farnsworth and Lisa King from their roles as co-CEOs of the company and named Colucci as interim CEO. According to the board, King had previously, incorrectly authorized naming Farnsworth as a co-CEO on an SEC form, and then another, inaccurate SEC form was filed by Vinco executives on July 22.
On Aug. 10, the board accused the Farnsworth Group of ” attempting to seize control of Vinco” through a series of aggressive actions, including “creating chaos and holding Company systems and assets hostage from the Company’s legally appointed officers.”
Finally, on Aug. 19, a court issued an order forcing the company to name King as a co-CEO.
The Implications for BBIG Stock
Vinco’s board and its leadership team seem to have been quarreling a great deal amongst themselves over the last several weeks. Moreover, the three, current co-CEOs are likely to have difficulties reaching consensus among themselves and making decisions.
Consequently, Vinco’s execution will probably not be great going forward, causing BBIG stock to be very risky at this point.
On the date of publication, Larry Ramer 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.
