BBIG Stock won’t shake the volatility of its memes anytime soon
Vinco Ventures (NASDAQ:FAT) the stock has seen an excellent advance recently, although its choppy uptrend appears to be receding.
BBIG stock has been incredibly volatile over the past month, but is trading over 140% from its August 24 level.
It has a few projects underway that could potentially pay off big down the road, but the company has yet to demonstrate its viability, making it nothing more than a stockpile of memes.
BBIG stock has risen 360% since the start of the year. Most of those gains came in August when it became popular among even stock investors.
In addition, its short volume ratio has exceeded 20% in the past two months.
In the absence of solid growth catalysts, the sharp rise in its stock price could easily be reversed. Therefore, investing in BBIG stocks is a risky business at this time.
Recent companies and BBIG actions
Vinco and Zash Global Media developed a joint venture called ZVV media Partners earlier this year.
They acquired an abridged video platform Lomotif, with the intention of competing TIC Tac. Lomotif has over 31 million monthly active users worldwide and over 200 million installations.
However, the app gets a meager average rating of 3.4 on Google’s Play Store despite its success. It mimicked TikTok, but as its user rating suggests, it does a terrible job.
Additionally, Vinco, through its subsidiary Emmersion Entertainment, released an NFT album with Canadian rapper Tory Lanez. This gave fans access to the music and artwork for each song.
The company even says fans could resell the NFT for a profit.
Much depends on the success of future versions. Naturally, if future versions are in high demand, only then would this make the prospects for resale more lucrative.
However, Vinco is most likely limited to his initial deal with the artists. It remains to be seen how profitable these NFT creations can become in the long run.
Until these questions are clear, BBIG stocks remain a high risk investment.
Vinco’s financial performance is a major concern that will likely deter most investors from betting on the company.
For starters, dilution has been a major issue for the company as its stock count has grown over 990% year over year to 97 million.
Based on its current valuation, BBIG share trades close nine times forward sales. In addition, there are still a large number of warrants and convertible bonds on the books.
The second quarter had $ 80 million in cash and $ 5.75 million in debt. Revenue for the quarter was $ 2.69 million, a decrease of 48% from the prior year period.
The company’s net loss widened to $ 183.9 million from a net loss of $ 1.62 million. The sharp increase in losses is attributable to the issuance of new warrants during the period.
Going forward, Vinco must demonstrate that it can effectively run a financially sound business free from dilution and additional debt.
He must also convince the market to produce consistent sales from his relatively untested approach.
Conclusion on BBIG share
BBIG is another stock that’s caught on fire due to the retail frenzy. Like many other stocks even, however, it lacks the long-term growth engines that could help support the recovery.
Therefore, it remains an incredibly risky investment until the company can demonstrate that its businesses can generate stable cash flow.
It is best to avoid BBIG actions at this time.
At the date of publication, Muslim Farooque had (directly or indirectly) no position in the securities mentioned in this article. The opinions expressed in this article are those of the author, submitted to InvestorPlace.com Publication guidelines
Muslim Farooque is a passionate investor and an optimist at heart. A long-time player and passionate about technology, he has a particular affinity for analyzing technology stocks. Muslim holds a Bachelor of Science in Applied Accounting from Oxford Brookes University.