One of the big movers in today’s market is once again Vinco Ventures (NASDAQ:BBIG). Unfortunately for investors, shares of BBIG stock are moving in the wrong direction today, down around 7% in early afternoon trading.
This move comes as short interest continues to pick up in this stock. According to data from Fintel, the company’s short interest ratio currently sits at around 55%.
Additionally, it appears that there are now no shares available to short, with more than 325% of the float currently shorted. While this data is based on only one broker and is not all-encompassing, this data point certainly suggests that BBIG stock is becoming a crowded short trade.
In the near term, this can result in significant swings, both to the downside and the upside (if investors begin to believe a short squeeze is possible). Let’s dive into what investors may want to make of this stock right now.
BBIG Stock Is Becoming a Crowded Short Trade
With a share price of around $2 apiece, extremely high short interest, virtually no stock available to short, and high borrow fee rates, Vinco Ventures is a stock that certainly carries the right ingredients for a short squeeze. Accordingly, I wouldn’t be surprised to see massive near-term volatility with this name, particularly if short sellers decide to begin taking profits from their previous wins.
On a year-to-date basis, BBIG stock has declined more than 75%. Thus, this has been a very profitable trade for short-sellers. I wouldn’t be surprised to see a combination of short covering and interest from meme stock investors driving some rather wild moves in this stock in the days to come.
That said, this beaten-down consumer products company certainly doesn’t have great fundamentals. There are reasons why this stock is so heavily shorted. Accordingly, I’m not so sure a bet on this stock, long or short, is worthwhile, given the risk.
On the date of publication, Chris MacDonald 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.
