Every company has its fair share of risks. However, Vinco Ventures (NASDAQ:BBIG) is downright speculative. It’s wise to avoid BBIG stock, as Vinco Ventures is invested in an app with heavy competition from famous brands. Plus, the company is still looking for a chief executive. In addition, the potential to get delisted means Vinco Ventures isn’t a high-conviction holding for cautious investors.
It’s one thing to trade shares of Vinco Ventures for a quick price bump. If you’re planning to stay in the trade for a while, though, take note of the risks involved. The following three red flags should make any prospective Vinco Ventures investor think twice before hitting the “buy” button.
Vinco Ventures Still Hasn’t Announced a Permanent Chief Executive
As you may recall, Vinco Ventures experienced a virtual soap opera last year. Among other tumultuous events, there was a takeover attempt, multiple C-suite resignations and litigation.
The litigation was settled, but Vinco Ventures had a shakeup at the executive level. The company’s chief executive left the company, and Vinco Ventures apparently found an interim CEO.
However, as of Feb. 6, 2023, the company hasn’t announced a permanent CEO. It’s not encouraging that Vinco Ventures is attempting to operate, day after day and week after week, without a leader in that role.
Lomotif Has Tough, Relentless Competition
Late last year, Vinco Ventures acquired all of the ZVV equity interest of ZVV Media Partners, which owns an 80% stake in social media app Lomotif. So, if you’re going to invest in BBIG stock, you’d better have a strong conviction in the future success of Lomotif.
Lomotif is similar to ByteDance’s TikTok video-sharing platform. It will have to face fierce competition on a global level from TikTok, which is quite popular among young people.
Plus, Lomotif will have to compete against extremely well-capitalized companies. These include Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), which owns YouTube, and Meta Platforms (NASDAQ:META), which owns Instagram. Ask yourself: Do I really want to bet my hard-earned money on a video-sharing app that has to defend its market share against the likes of Alphabet and Meta Platforms?
BBIG Stock Could Get Booted from the Nasdaq Exchange
Here’s the biggest red flag of all. This, by itself, is a valid reason not to touch BBIG stock with a 10-foot pole.
Vinco Ventures might end up getting delisted from the Nasdaq exchange. Late last year, the company received a deficiency notice from the Nasdaq exchange because Vinco Ventures failed to file its quarterly Form 10-Q in a timely manner.
That’s certainly not a good sign, wouldn’t you agree? Moreover, BBIG stock has traded under $1 since early November of last year. That’s a problem, because the Nasdaq exchange has sometimes been known to delist stocks that trade below $1 for too long. So, feel free to add the possibility of future delisting to the reasons not to invest your money in Vinco Ventures.
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.