BBIG Stock: Vinco Ventures Trending Again, Is It a Buy?
If you missed it this week, meme stocks are back in fashion. Following an over 80% drawdown from its high, Vinco Ventures (Nasdaq: BBIG) is rallying, up 30% this week. But does BBIG stock have more room to run?
Retail traders on social media sites are throwing around the “S” word again (short squeeze), and BBIG stock is no stranger. For example, in January, BBIG’s stock price raced over 100% within a week.
Nonetheless, traders are targeting Vinco Ventures stock again as volume picks up. Is another short squeeze on the horizon? Keep reading to learn why BBIG stock is trending and what to expect next.
Why Are Traders Targeting BBIG Stock
Vinco Ventures stock is one of the top trending stocks on r/Shortsqueeze, a popular Reddit thread where traders post popular short ideas. Following GameStop (NYSE: GME), BBIG stock is the second most popular post.
You would assume they are buying the stock expecting a short squeeze. But looking deeper, this may not be the case.
In fact, the latest short interest report shows a decrease of around 17M shares short from January. Instead, Reddit users are looking at options data and predicting a big move soon.
Furthermore, investors expect an announcement on the company spinning off its crypto business, Cryptyde. If the company sticks with its plans to spin the firm off in early 2022, it could act as a second catalyst.
At the same time, BBIG stock is still down over 75% from its high of $12.49 per share. Is it just another bounce on the way down? Or, is this time different?
What Is Vinco Ventures and Why It’s Important
Vinco Ventures is a holding company focusing on digital media and other tech. In other words, it looks to add businesses to its portfolio and scale them to grow.
So far, BBIG stock owns a few businesses with industry potential.
- Lomotif: Short-form video (similar to TikTok).
- Cryptyde: Blockchain and crypto.
- Honey Badger: Digital marketing.
- Social Pulse Media: Digital marketing & consulting.
- AdRizer: AI advertising solutions.
Although this may look like a lot, many of these businesses are either newly established or still being developed. With this in mind, Lomotif is the company’s flagship brand after a merge with ZASH Global.
The short video media app is similar to TikTok with video and music editing ability. So far, the app is most popular in India and parts of Asia but is starting to grow a presence in the U.S. In fact, it’s one of the largest social video apps with over 500K downloads.
Moreover, the app features an entertainment network called LomoTV. The network offers original content, such as the recent partnership with Shaquille O’Neal and its launch at the Electronic Daisy Carnival.
At any rate, the company is generating interest and continues building its portfolio of brands. Despite the progress, Vinco still has a way to prove itself to investors.
The Case Against BBIG Stock
Even though the company is making big strides right now, there are still a few unknowns. For one thing, Vinco continues partnering and spinning off businesses. Yet it needs to give investors a clearer direction the company is heading.
You can see a foggy idea of what BBIG stock wants to grow into. On the one hand, you have a company that owns several digital market firms, a short-form video app, and a blockchain company. But, management has yet to provide a clear picture of what to expect in the long run.
On top of this, the company is losing money by a widening margin. In the third quarter, revenue, net income, and gross profit margin fell significantly.
At the same time, as an early-stage company, losses are to be expected. Much of the losses came from the Lomotif transaction. And the report was back in November. The company has made significant progress since then.
When the company reports earnings in April, will we see the losses continue piling up? Or will they gain momentum?
The Case for Buying
BBIG stock has potential in big industries like short-form video, digital advertising, and crypto with the current brands. Not only that, but they also have the ability to tie these businesses together and create a money funnel.
If the company can successfully grow its audience on the video app, it can then monetize it with ad solutions. So, the more users the firm attracts, the better the ad business will be.
In other words, more users equal more money in the company’s pocket. With this in mind, ad revenue can add up significantly without adding too many costs.
For example, ads account for 80% of Google’s parent company Alphabet’s (Nasdaq: GOOG) total revenue. In the fourth quarter, google advertising generated $46.2B while total revenue reached $56.9B.
So, Vinco can do it, but it might be a bumpy road ahead.
What to Expect Next From BBIG Stock
BBIG stock is now up 18% despite a selloff in late January with this week’s runup. Yet if you bought during last year’s rally, you are most likely down on your investment.
The good news is it has the potential to recover. But it might take some time to get there, and you may lose even more on the way. So, if you are looking for a high-risk, high-return scenario, BBIG stock may be worth a look.
Otherwise, if you want to avoid risk, investing in Vinco Ventures may not be for you. At the moment, there’s a reason BBIG is a penny stock.
Vinco can become a user favorite. So far, it’s a hit in India. But it will face stiffer competition in the U.S., with TikTok dominating the market and other tech giants trying to steal their share.
The company is making progress, but will it be enough to turn a profit? We will better understand what to expect during the company’s earnings next month.