Thursday, February 22, 2024
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Vinco Ventures Outlook: There Is No Escape From the BBIG Stock Death Spiral

You just never know what Vinco Ventures (NASDAQ:BBIG) might do next. The company is truly unpredictable, but Vinco Ventures’ adventurous spirit won’t be enough to save BBIG stock. Don’t be too surprised if Vinco Ventures ends up on an over-the-counter (OTC) exchange at some point.

I’ll admit that Vinco Ventures is full of interesting business ideas. However, not all ideas can be successfully monetized. In terms of profitability (or the lack thereof), Vinco Ventures has a poor track record.

BBIG stock has lost a lot of value since late 2021. Vinco Ventures’ loyal investors might hold out hope for a miraculous recovery. Unfortunately, even while Vinco Ventures has some intriguing irons in the proverbial fire, the prospects of a share-price comeback are slim to none.

Vinco Ventures Bets on Gossip Magazines and a TikTok Rival

So, what has Vinco Ventures been up to lately? For one thing, the company struck a deal to acquire The National Enquirer, The Globe, The National Examiner and The National Enquirer UK. To put it charitably, these publications are regarded as celebrity gossip magazines. Some folks would probably regard them as disreputable, or at least as unreliable sources of information.

As InvestorPlace Assistant News Writer Eddie Pan explained in regard to The National Enquirer, “Both the print and digital versions cost $2.69 per issue or $139.88 per year under a yearly plan.” Furthermore, “A six-month plan is available as well, costing $3.32 per issue or $86.32 for six months.”

Here’s my take on this. We’re living in a time when information and entertainment is abundantly available online for free. Hence, I’m skeptical that Vinco Ventures’ investment in these subscription-model magazine brands will yield good results.

Vinco Ventures is also betting that the U.S. government will ban China-based social media platform TikTok. A press release from Vinco Ventures seems to suggest that this proposed ban could take place in the near future.

The not-so-subtle implication is that Vinco Ventures’ similar social media platformLomotif, would “step up and fill the void created by a potential TikTok ban.” As of this writing, the TikTok app hasn’t actually been banned in the U.S. Even if this happens, there’s no guarantee that American social media users would switch to Lomotif. Instead, they might use Meta Platforms’ (NASDAQ:META) Facebook reels or some other platform.

BBIG Stock Will Probably Be Delisted Eventually

If seems like Vinco Ventures keeps playing a dangerous game of “press your luck” with the Nasdaq exchange. A company can only flout the exchange’s listing rules so many times. Sooner or later, Vinco Ventures is likely to be delisted and then end up on an OTC exchange.

Vinco Ventures’ press releases page is littered with alarming announcements. On Feb. 21, the company still hadn’t filed its Form 10-Q quarterly report for the quarter that ended on June 30, 2022. Prior to that, the Nasdaq exchange’s staff warned Vinco Ventures because the company failed to file Form 10-Qs for the periods ended June 30, 2022, and Sept. 30, 2022.

Vinco Ventures did eventually file a Form 10-Q for the period ended June 30, 2022. As it turned out, the company’s operating loss widened to $31.77 million from $5.04 million in the year-earlier quarter.

In addition to all of that, the Nasdaq exchange’s staff warned Vinco Ventures because the company “had not held an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end.” Plus, bear in mind that BBIG stock trades below $1, and the Nasdaq exchange has been known to sometimes delist stocks that trade below $1 for too long.

Maintain a Safe Distance from BBIG Stock

The term “death spiral” might sound harsh, but I truly believe it applies to Vinco Ventures in 2023. It’s almost as if the company is daring the Nasdaq exchange to delist Vinco Ventures.

Moreover, Vinco Ventures might or might not succeed with its TikTok rival and its investment in gossip magazines. Even if Vinco Ventures’ ideas are interesting, it’s highly risky to wager on them. Therefore, it’s wise to avoid BBIG stock as it will almost certainly continue on its prolonged, painful death spiral.

On the date of publication, David Moadel 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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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