To put it simply, Vinco Ventures (NASDAQ:BBIG) likes to acquire businesses with a technology slant. If you like those businesses, then BBIG stock should pique your interest.
As we’ll see, Vinco Ventures certainly sparked the market’s interest earlier this year, to the point where the share price quadrupled in value. Whether that’s a good thing or not, is another matter entirely.
Some value-focused investors can find reasons to dislike BBIG stock, and we’ll definitely address those concerns. On the other hand, if you’re into non-fungible tokens (NFT’s), Vinco Ventures might be right up your alley.
Really, what we have here is a hero-or-zero type of investment. So, get ready for an intriguing gamble that could pay off big-time, or completely drain your account if you’re not careful.
A Closer Look at BBIG Stock
Back in early January, you could have bought Vinco shares for just $1.25 apiece. Today, there’s no chance you’ll get them at that price.
Was it Reddit traders who propelled BBIG stock from $2.19 in August, to $12.49 in September?
It’s entirely possible, as there was no particular news-based catalyst that would justify a price move of that magnitude.
I’m not judging, just reporting. In any case, the Vinco share price fell back below $10 as quickly as it rose, and stayed there through mid-October.
Here’s what’s troubling. If BBIG stock is trading at around $7 or $8, but Vinco Ventures’ trailing 12-month earnings per share is -$12.56, that’s a definite red flag.
That’s one way to measure Vinco’s fiscal health, and I’ll throw some more financial stats at you now. If you can withstand the assault, then you may be ready to invest in Vinco Ventures.
Innovating, but Not Necessarily Thriving
Buy, innovate, grow. That’s the credo of Vinco Ventures – but is the company growing financially?
I’d be hard-pressed to answer “yes” to that question. Unfortunately, the company’s second-quarter 2021 results set off some alarm bells.
The press release brags about how Vinco Ventures bought interests in other businesses. That’s fine, but rapid expansion can dent a company’s bottom line.
Thus, Vinco’s second-quarter revenue decreased by 47.97% to $2.69 million, as compared to $5.17 million in the year-ago quarter.
Furthermore, the company’s gross profit declined 16.97% year-over-year.
Perhaps worst of all, Vinco Ventures’ second-quarter 2021 net earnings loss accelerated to $183.89 million, or $5.13 per basic and diluted share.
That’s significantly worse than the net loss of $1.62 million (18 cents per basic and diluted share) reported during the second quarter of 2020.
NFT’s to the Rescue?
What could possibly dig Vinco Ventures out of this financial hole?
If the company’s investments in the NFT space are wildly successful, then maybe Vinco could post better bottom-line results in the upcoming quarters.
We should at least acknowledge that Vinco Ventures is doing interesting things in the world of NFT’s.
For instance, not long ago, Vinco subsidiary Emmersive Entertainment announced its plan to launch the world’s first NFT streaming movie soundtrack.
Apparently, the Karen movie soundtrack will feature music from artists including CeeLo Green, V. Bozeman and Kota the Friend.
This soundtrack is “another step in our focus on leveraging blockchain technologies to disrupt the entertainment industry with a specific concentration on music and art,” according to Vinco Ventures Chief Strategy Officer Brian McFadden.
In a similar vein, Vinco recently revealed that Emmersive Entertainment will release “world renown artist” Super Buddha’s E-NFT, entitled “GLOBAL UNITY.”
This release is advertised as “a stunning visual wonderment that captures the spirit of humanity’s true purpose… Global Unity” – ambitious, to say the least.
The Bottom Line
Are you willing and able to overlook Vinco Ventures’ financial issues, and focus on the potential of the burgeoning NFT market?
That’s the question that every BBIG stock investor should ask himself or herself.
If the answer is yes, then by all means, proceed with caution.
Vinco’s a gamble that could pay off big-time. Yet, it’s still not the type of investment that anyone should go “all in” for.
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.