Vinco Ventures Inc (NASDAQ: BBIG) is screaming for the top in the market this morning, and for good reason. The company announced a merger that will establish a new streaming player. Here’s what’s going on:
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- Vinco Ventures Enters Agreement With Zash Global Media
- Why This Is a Big Deal
- Risks to Consider Before Buying BBIG Stock
- Final Thoughts
Vinco Ventures Enters Agreement With Zash Global Media
In the SEC filing, Vinco Ventures announced that it, and Zash Global Media and Entertainment Corporation, entered into a contribution agreement. Through the agreement, the two companies are working to establish a newly-formed company to engage in the development and production of consumer facing content and related activities.
In the reverse merger, Vinco Ventures and Zash have both agreed to contribute certain assets to the combined company. The combined company intends on entering into a content distribution agreement with American Syndication Media Corporation.
In the release, BBIG said that the combined company will not assume any liabilities of either Vinco Ventures or Zash, with the exception of the liabilities that arise in or are specifically related to periods, events or occurrences happening with respect to Contributed Assets.
Finally, in the filing, BBIG said that the agreement came to a close on January 19, 2021.
Why This Is a Big Deal
Through the reverse merger, BBIG and Zash are working to become the next big streaming video company. The two worked together on a Facebook video campaign, driving more than 2 billion video views in a very short period of time.
So, what we know is that the partnership has the potential to grab the attention of the target audience, and in a big way. With the closing of the agreement, the two companies are ready to take the streaming video industry by storm. All in all, this agreement is one that has the potential to drive significant revenue, likely driving Vinco Ventures to profitability.
Moreover, prior to the announcement today, BBIG stock experienced heavy short interest. With the positive news, short sellers began losing money and are in a race to cover, helping to create the tremendous gains that we’re seeing in the stock today.
Risks to Consider Before Buying BBIG Stock
If you’re going to invest, you need to accept risks. The fact of the matter is that any investment you make will come with the risk of loss. When it comes to an investment in BBIG stock, you should consider the following risks prior to diving in:
- Profitability. Vinco Ventures drives quite a bit of revenue, but that revenue isn’t enough. In fact, the company has been operating at a loss since inception. If the company is unable to reach profitability prior to funds running dry, it may look to capital markets as a way to raise the money it needs, leading to dilution and potentially significant losses.
- Penny Stock Risks. BBIG is a penny stock. As a penny stock, there are additional risks to consider. In particular, the stock is known for heavy volatility which will make entrance and exit decisions difficult. Moreover, the company’s business model is an unproven one. As a result, the investment is a highly speculative one.
While all investments will come with risk, an investment in BBIG stock could be a very lucrative move. At the end of the day, the company’s agreement with Zash will create what could become the next big player in streaming media. That’s exciting news making the stock one that’s well worth watching.