It’s safe to say any buzz surrounding Vinco Ventures (NASDAQ:BBIG) has long since left the room. After falling to penny stock levels even before the recent bear market emerged, the market downturn has further soured sentiment for BBIG stock.
In all, the stock has fallen by around 90% from its meme-era highs. To many, this falling into the market graveyard may seem like a warning sign to stay away from shares in this digital media holding company. However, instead of viewing it as a warning sign, you may want to see it instead as an opportunity. However, not simply because shares are now “cheap” compared to past highs.
Many speculative stocks have experienced big drops this year, but are hardly bargains. In the case of Vinco, though, the situation may be different. Mainly, due to the high potential with one of the key “ventures” in its portfolio.
What is it? Let’s dive in and take a closer look.
The Bad News (and Good News) With BBIG Stock
Earlier this month, I broke down why exactly Vinco Ventures shares are now languishing at rock-bottom prices. As a speculative, early-stage company, market euphoria (or lack thereof) for the time being will play a big role in its price performance.
Such dynamics were just fine for BBIG stock investors back in 2021. At the time, with market euphoria in full swing, shares were able to command prices that were downright lofty compared to its past penny stock levels. In 2022, however, with numerous uncertainties (high inflation, rising interest rates, growing recession risk) turning investors from risk-hungry to risk-averse, names like this one have experienced some of the hardest falls.
Worse yet, it’s not out of the question for it to continue performing poorly in the short term. I wouldn’t buy this stock, with the expectation that it’s going to experience a fast money rebound.
Having said that, with this bit of short-term bad news comes a bit of long-term good news. Vinco Ventures may be down, but it’s not out. Again, there’s high potential with one of its key “ventures.” A “venture” that, while still at the startup stage tomorrow, could scale into a large enterprise down the road.
Don’t Underestimate Lomotif
If you’ve been following BBIG stock, you of course are aware of the key “venture” I’m talking about: video sharing site Lomotif. The company, through a joint venture with its strategic partner ZASH Global, owns an 80% stake in this “venture.”
Yes, Lomotif, which is similar to TikTok, has its work cut out for it. With a global user base numbering in the tens of millions, it has a ways to go before it catches up to TikTok, which could have as many as 1 billion monthly active users (MAUs) worldwide.
Then again, it may not be a long climb to get there. So far, the platform has found big success in India. In that high-growth market alone, it already has 41 million active users. So, penetrating the U.S. market could be easier than it seems. Even as TikTok clearly holds the first-mover advantage.
As InvestorPlace’s Josh Enomoto discussed earlier this month, TikTok — owned by China-based ByteDance — is again finding itself under scrutiny by some U.S. lawmakers. Although not a lock that TikTok is still at risk of getting banned, growing concern about data privacy on the site could help attract users to alternative platforms like Lomotif.
Bottom Line on BBIG Stock
Overall, Lomotif is one of the most appealing parts of the story with Vinco Ventures stock. However, it’s not the whole story. There’s a lot of potential with another one of its key holdings: digital ad firm AdRizer.
Vinco also has a fairly large cash position compared to its market capitalization of $233.1 million. Presumably, all this cash will be plowed into Lomotif’s growth. Or will it? The company could use some of it to finance investment in new opportunities.
There’s no getting around that this is a risky, speculative investment. Although “hope and hype” is no longer driving it, it may remain volatile. However, the upside potential alone from Lomotif appears to far outweigh the risk of a total wipeout. If you’re looking for bargain moonshot stocks, keep BBIG stock at the top of your watchlist.
BBIG stock earns a “B” rating in my Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.