Shares of Vinco Ventures (OTCMKTS:BBIG) stock closed higher by 127% today and were up by as much as 7,150% during afternoon intraday trading. Still, shareholders shouldn’t place too much hope on today’s gains.
There is no news to directly explain the incline, although stocks trading in the over-the-counter (OTC) market are prone to volatile moves due to lowered liquidity.
At one point today, the market capitalization for BBIG stock hovered around $85,000, which is around the median family income for two people in many U.S. states. With today’s rise, BBIG is now trading at just 1.2 cents. That has led to supporters of Vinco offering to buy out the company:
BBIG Stock Soars Higher
BBIG stock was delisted from the Nasdaq exchange in late October. Since then, the situation has only gotten worse, with the stock providing a year-to-date (YTD) loss of over 99%. While BBIG traded on the Nasdaq, it received a slew of noncompliance notices for various issues, such as filing its quarterly earnings and annual report late. The company also experienced severe management issues, such as an attempted hostile takeover involving its top executives.
Vinco’s downfall was led by many internal failures. These included TikTok competitor Lomotif and failed plans to acquire the National Enquirer. As reported by Business Insider, Lomotif wasn’t working as of Aug. 2. Vinco announced in July that it would no longer pursue the National Enquirer acquisition as it “wasn’t in its best interest.”
Meanwhile, the company’s website has seemingly disappeared, providing a barrier for shareholders to receive information.
With thousands of other suitable companies to invest in, investors should avoid BBIG stock and watch from the sidelines. Still, shareholders have taken it upon themselves to create their own website in support of the community of shareholders and Vinco’s uncertain future. At the time of this writing, the community boasted 2,860 shareholders who allegedly collectively own 50.12 million shares.
The downfall of Vinco provides a valuable lesson. When there are clear red flags, such as Nasdaq compliance issues and late earnings, its best to avoid investing in that company.
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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.
