Shares of Vinco Ventures (NASDAQ:BBIG) are plunging lower by about 20% after the company enacted a 1-for-20 reverse stock split, effective today, May 11. The share consolidation, approved by shareholders at Vinco’s last shareholder meeting, will reduce common stock outstanding to about 13 million from 260 million shares. Any shareholder owning fractional shares as a result of the split will have their shares rounded up to the nearest whole share.
“We wish to thank our investors for their continued support as we work to refocus Vinco’s operations. The approval of the reverse split under the Company’s plan to maintain its Nasdaq listing, together with our ongoing refocusing efforts, better positions us to realize the great potential we see ahead,” said CEO James Robertson.
BBIG Stock Begins Trading on Reverse Split Adjusted Basis
As echoed by Robertson, Vinco executed the reverse split to meet the Nasdaq minimum price requirement of $1. A failure to meet this requirement could result in a delisting from the exchange.
However, the company is still on the hook for another Nasdaq requirement. Vinco has yet to file its Form 10-K for the year ended Dec. 31, 2022. In a determination letter dated April 14, Vinco stated that it would file the 10-K by June 2 and that it “continues to remain confident that it will file its 10-K by that date.”
With one Nasdaq requirement out of the way, Vinco can now place more emphasis on its core strategy, which is to leverage digital content and increase growth through acquisitions. Vinco seeks to use its planned acquisition of the National Enquirer, the National Examiner and Globe to assist with this plan.
To do this, Vinco has created five key pillars for value creation. Pillars one through three involve using its planned acquisitions to create more content, in the form of TV shows, podcasts, documentaries and more. Vinco also plans on creating more subscription services on top of existing subscription services and to explore potential intellectual property and licensing opportunities. Pillars four and five involve increasing content collaborations, such as with its social media platform Lomotif, and pursuing other content outside of its planned acquisition.
On the date of publication, Eddie Pan 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.