Vinco Ventures shares (NASDAQ:BBIG) were up nearly 81% on Friday and another 44% up in after hours trading. A low price of $3.35 on Friday rocketed to $7.67, and we believe this isn’t the top. What is the catalyst for Vinco Ventures and what caused this increase?

The company

Vinco Ventures is a leader in selective acquisitions leveraging market opportunities by buying, innovating and growing (B.I.G). The big driving force behind the company is that they announced on July 23rd that they had closed a deal to acquire Lomotif. Lomotif is one of the top short video platforms in the world, similar to the liked of TikTok, and boasts over 31 million monthly active users. TikTok, previously known as Musical.ly, is one of the top social media platforms, having boomed during the pandemic due to its easy way to create short, fun and engaging content. The demand for short media, usually under one minute in length, has grown tremendously and has captivated the younger audience that demands quick satisfaction to fulfil short attention spans.

Lomotif is in direct competition with TikTok, but is set to thrive where they cannot. TikTok was banned in India, which has a population of over one billion people. Lomotif, however, is able to be downloaded in India and will do well off of this audience. Lomotif also has content deals with the likes of Facebook, Instagram and Snapchat.

Valuation

A third-party independent valuation shows the combined value of Lomotif and Vinco Ventures is over $5B. Yet the market cap of BBIG is $320M at the close on Friday. This would indicate a growth potential in the Vinco Ventures share price by 15 times, around $80 per share.

NFT

Another reason that investors were recently interested in Vinco Ventures is their connection to NFTs (non-fingible tokens). A subsidary of BBIG, Emmersive Entertainment, announced their first streaming platform, led by the exclusive release of a new album by Tory Lanez. This is accompanied by a limited-edition NFT.

NFT companies thrived in March as the hype around them was created. Takung Art Co saw their stock price rise from $4 to $74 in March as NFTs established themselves. Since then, any news relating to this sector gets the interest of both the trading and crypto world.

Short squeeze

On Friday we witnessed a short squeeze on Support.com. You can read more about what causes a short squeeze here. BBIG was over 50% short due to delays in the merger and losses reported in their earnings recently. So once this stock was moving, a major demand in buying volume occurred, seeing over 235M shares trade hands.

What next for Vinco Ventures shares?

I believe the strong catalyst and short covering on BBIG could allow for more upside for this company short term. But also long term, with a valuation of $5B, this company looks undervalued. Once profits start coming in for this growth company, we could see some very strong growth. One to keep an eye on.

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