Placing it simply just, Vinco Ventures (NASDAQ:BBIG) is the type of penny stock that is a hard pass in usual current market conditions. But, of class, what we have witnessed enjoy out in the previous 12 months has been anything but standard. With phenomena like “meme inventory insanity,” rolling the dice on a little something like BBIG inventory has grow to be a worthwhile tactic.
But, as you probably know, that is been altering. It’s still up for debate no matter whether the aforementioned investing/buying and selling trend nevertheless has runway. But there are some indicators this trend is winding down. Even if it does continue on, and “meme stocks” bounce back again, who’s to say this a person goes alongside for the experience?
Yes, as I broke it down in my last report, there’s a little something that could send out it soaring, no matter if or not the Reddit shares pattern proceeds. That would be the likelihood for renewed excitement, as additional grow to be conscious of the possible of one of the company’s latest acquisitions.
Nonetheless, looking at the aspects, or lack thereof? Any form of pop will at most effective be quick-lived, prior to the vocal brief-sellers convey its purple flags to gentle. At the finish of the day, as this is little much more than you’re yard wide variety penny stock? Take into account “avoid” the keyword for this situation.
Could the Hype Return for BBIG Stock?
Immediately after July’s “meme stock” crash, can this craze come back for a 3rd wave? There are some signals that say yes, and some signs that say no. The thesis laid out by Barron’s, that the “meme inventory trade is far from in excess of,” could continue to play out. Millennial and Technology Z took to retail stock investing all through the pandemic, and both generational cohorts could continue to pursue this tactic. It may ebb-and-circulation like it is completed twice ahead of, but that doesn’t rule out the prospects of a 3rd speculative wave.
Nevertheless, there’s the “lack of new money” counter argument created by skeptics like Michael Burry of Huge Brief fame. Without the need of new members inclined to chase the “meme stock” trend, it could continue to collapse. In convert, sending the stocks it took “to the moon” down with it. So, who’s correct and who’s wrong? Yet again, only time will tell.
It’s also up for debate no matter whether BBIG inventory in particular would gain from the next achievable wave. Look at out a tracker of the most talked-about stocks on Reddit’s r/WallStreetBets, and it ranks low on the listing. The names in close proximity to the major, such as prime meme performs like AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME), together with small-squeeze plays like Clover Wellbeing (NASDAQ:CLOV) and ContextLogic (NASDAQ:Desire) show up to be ones that’ll capture the most interest (and acquire the most) if a “third wave” pans out.
Now, this pattern by itself is not the only point that could mail Vinco Ventures inventory soaring yet again. A probable surge in hoopla from its most recent M&A deal on your own could be ample to go the needle. But if you scrutinize its sketchy facts, it starts off to appear like fewer of a game changer.
Recent Acquisition Is Barely the Offer of the Century
The final time I discussed BBIG stock, I broke down how the stock could surge once more, unbiased of the “meme stock” pattern. How? Based mostly on doable excitement all around its acquisition of aspiring TikTok competitor Lomotif.
My theory at the time was that the corporation could advertise the narrative that acquiring it is like “getting into the subsequent TikTok early,” which could attract a mad dash into its shares. Thinly traded compared to other “meme shares,” this could outcome in a a extraordinary go greater.
Nevertheless, primarily based on modern commentary, it’s apparent this is far from the offer of the century. Late final thirty day period, InvestorPlace’s Mark Hake pointed out the unanswered queries about the transaction. These involve limited facts about its current outstanding share rely, as perfectly as a absence of confirmation of the Lomotif order price tag. With this, it is tough to evaluate whether BBIG stock is affordable or overvalued at today’s prices (around $3.30 for every share).
I would not be stunned if this gets the upcoming target of a Hindenburg Investigate-form vocal short-vendor. A momentary bubble could kind if investors hop aboard wondering this is the future TikTok. But stated bubble could speedily get popped, after scathing “short reports” begin producing the rounds on Twitter (NASDAQ:TWTR) and economical media stores.
An Irrational Rally Might Be Possible, but Nonetheless a Name To Prevent
It’s not obtaining a lot awareness now on r/WallStreetBets. But dependent if more buzz occurs from this company owning a TikTok-in-the-earning, shares stand to rally after all over again. Still though an additional irrational rally could be doable, the (absence) of particulars with this offer sign it’s not finest to gamble on this predicament.
Bottom line: Remain away from BBIG inventory.
On Penny Shares and Reduced-Quantity Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about firms that have a market cap of much less than $100 million or trade much less than 100,000 shares just about every working day. That is due to the fact these “penny stocks” are commonly the playground for rip-off artists and industry manipulators. If we ever do publish commentary on a small-quantity inventory that may be influenced by our commentary, we need that InvestorPlace.com’s writers disclose this actuality and alert viewers of the threats.
On the day of publication, Thomas Niel did not have (both instantly or indirectly) any positions in the securities described in this report. The opinions expressed in this short article are individuals of the writer, matter to the InvestorPlace.com Publishing Pointers.
Thomas Niel, contributor for InvestorPlace.com, has been crafting one-stock evaluation for world wide web-primarily based publications due to the fact 2016.
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