Vinco Ventures, a digital media company is the most recent meme stock that has seen a dramatic rise in popularity over the last few weeks. 

Various investor chatrooms like Reddit’s r/WallStreetBets and StockTwits have been abuzz with BBIG lately. As retail investors get into social media hype, this NFT investment has seen its price more than double. BBIG stock soared to 221.95% over the last week, and climbed more than 484% in just 12 months.

While the stock gained popularity due to social media, its fundamentals and financials still present a very grim picture for value investors. This stock is definitely one that I am a bearish pessimist. Let’s discuss what investors may want to watch with this NFT stock right now. (See Vinco Ventures stock charts on TipRanks)

Dismal Quarterly Results

Okay, let’s start with the bad news.

Vinco Ventures is not looking good despite all the hype.

Vinco Ventures posted disappointing results in its second quarter earnings. It posted an operating loss total of $4.97million, which is significantly higher than the $1.21 million loss last year for this period.

Revenue fell 48% to $2.69million year-over-year. These numbers don’t bode well for investors who hold BBIG stock.

A 17% drop in gross profit indicates that the margins of core operations have been shaky for BBIG. Due to warrants being issued, this quarter saw the company suffer a $184million net loss. Analysts were surprised by the magnitude of the losses.

The company’s cash balance dropped by almost $10 million this quarter. BBIG stock, at its current levels of risk, is a better choice for investors than stocks like TIAA and BBIG.

Despite this, investors still have reasons to consider this stock. Vinco Ventures: Let’s find out what the hype is all about.

NFT Exuberance

Vinco Ventures has forayed into the NFT space by launching its E-NFT platform this year. All companies that are involved in this industry have seen their valuations rise due to the booming market for NFTs. BBIG stock was a beneficiary of this uptrend.

The rise in cryptocurrency prices has supported a surge in sales for digital collectibles. NFTs are a viable option in an unstable crypto market.

Analysts believe the recent bull market in speculative assets has led to a surge in investor interest for NFTs and cryptocurrency. Regardless of what the cause may be, BBIG stocks are a viable option for equity investors looking to get involved in this market.

If Vinco Ventures EFT offerings are successful, everything is possible. Vinco Ventures was a struggling company from a financial perspective for some time. The current positioning of this stock, which is high-risk and high-reward, gives reason for investors to bet on it being a turnaround stock.

Lomotif Acquisition

Vinco Ventures recently acquired an 80% stake in Lomotif Private Limited, which owns the short video content platform Lomotif. Vinco Ventures completed this acquisition using a joint venture entity, ZVV Media. 

This acquisition seems to be popular with investors for many reasons. The deal could diversify Vinco Ventures revenue streams and create a new segment. The digital media sector is also attracting a lot attention (similarly to NFTs) and it is one where hyper-growth investors flock to.

Vinco Ventures appears to be making a lot of money trying to attract all aggressive speculators to BBIG stock. Investors looking to make a big investment in these sectors will find them attractive due to their high growth potential.

Locomotif has high user growth as well as the possibility of parabolic upside during a bull market. Vinco Ventures has paid an excessive premium for this deal. Some investors wonder whether this is a sign that they are being overpaid.

Investors are now asking themselves whether BBIG stock really is worth the risk.

TipRanks’ Smart Score

Vinco Ventures has a TipRanks’ Smart Score of 4, implying it is likely to perform in line with the market. TipRanks’ Smart Score is derived from 8 unique data sets including Analyst recommendations, Crowd Wisdom, Hedge Fund Activity, Media Sentiment and multiple Technical stock factors.

Bottom Line

Where will BBIG stock go from here? It is difficult to predict.

It’s possible that a cooling period might be necessary after such an increase in company valuation. However, the company’s current valuation of less than $700million is encouraging some investors to believe there might be more growth potential if this market allows for valuation expansions.

BBIG stock has been a remarkable turnaround story despite not having great earnings. As we have seen recently with many other meme stocks in trouble, there is no limit to what these stocks can do if they get squeezed.

The stock is too expensive for most conservative investors. BBIG stock can be volatile so it is best to avoid taking a position.

Disclosure: Chris MacDonald had no position at the time this article was published.

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