Vinco Ventures Stock Up 482% in 2021 – Time to Buy BBIG Stock?
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The price of Vinco Ventures stock has soared in 2021 by 482% as the company has become a popular target of the retail army amid its elevated short float.
The stock has experienced multiple pronounced single-day upticks throughout the year including a 196% jump back in January this year and an 81% uptick on 27 August following the release of its second-quarter earnings report.
Could this volatile price action continue in the future and, more importantly, will it favor bulls? In the following article, I’ll take a closer look at the latest price action seen by BBIG stock to outline plausible scenarios for the next few weeks.
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Vinco Ventures Stock Price – Technical Analysis
Data from meme-stock tracker Swaggy Stocks shows a pronounced uptick in comment volumes for BBIG stock in the last few days of August and earlier this month following the sharp increase in the stock price.
However, the number of comments relative to the total was still fairly small at 0.4% to possibly attribute this jump to retail participants only.
On 23 August, the company reported its financial results covering the second quarter of the year. Back then, it announced the completion of its acquisition of Lomotif – a social-media-like video editing platform – in partnership with ZASH Global Media, along with the acquisition of EVNT – a company that operates a marketplace for non-fungible tokens (NFTs).
During the three months ended on 30 June, the company reported revenues of $2.7 million – down 48% compared to the same period a year ago – while net losses landed at $184 million compared to $1.62 million it had reported in Q2 2020. In total, net losses for the first semester of 2021 landed at $246.1 million amid losses experienced due to the issuance of stock warrants.
Only a few days after this seemingly downbeat report, shares started to tick higher until reaching an intraday peak of $12 per share to then decline swiftly to its current level of $8 per share.
From 27 August to 3 September, trading volumes surged way past the 10-day average. This has been for a while a typical signal that a short-squeeze is taking place. At the moment, multiple sources including MarketBeat and Barrons are estimating a 17% to 19% total short float for BBIG stock.
Moving forward, the outlook for BBIG stock seems bullish amid a break above its upper trend line on the back of overly positive momentum readings. As long as that former resistance now turned to support holds, chances are that the stock may continue to rise.
Vinco Ventures Stock Price– Fundamental Analysis
Vinco Ventures is an investment company that acquires other businesses with promising prospects to accelerate their growth. The company was founded in 2017 and it specializes in finding companies that are set to exploit up-and-coming trends in the tech sector including the rise of e-commerce and cord-cutting, among others.
From 2016 to 2020, revenues produced by the company have ranged from $12.5 million to $16 million while it has swung to net losses in the past three years.
By the end of the second quarter of 2021, the company had $74.8 million in cash and equivalents and held $140 million in warrant liabilities. Moreover, the company reported negative stockholder’s equity of $27.54 million and a cash burn of over $24 million during this period.
Considering the company’s poor track record and its highly indebted balance sheet, the solvency of the business is fairly questionable, which is probably why its short float is currently sitting at elevated levels.
From a fundamental perspective, no asset held by the business is valuable enough to justify the company’s current $554 million market capitalization and this means that these latest short-squeezes are the leading cause for this distorted valuation.
Moving forward, investors should be cautious about BBIG as there seems to be a significant disconnection between the firm’s fundamentals and its market capitalization. Therefore, if at some point market sentiment toward the firm shifts, the odds of a sharp pullback in the stock price would increase dramatically and could possibly wipe a significant portion of the gains the stock has seen lately.
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