Savvy businesses know that there are things that create an immediate buzz among investors, like EVs, NFTs, PSPCs, and cryptocurrency. Enter Vinco Ventures (NASDAQ:FAT), a company with several interesting elements.
Vinco Ventures includes a TIC Tac-like app, non-fungible tokens (NFT), video and music content. Due to this exciting trading mode, BBIG stocks caught fire. Shares have risen 170% in the past month alone.
Vinco Ventures has a joint venture partnership with the support of Ted Farnsworth Zash Global Media, named ZVV Media Partners. Many investors may be familiar with Farnsworth and some of his earlier businesses; he is behind the failure MoviePass subscription service and Psychic Discovery Network, based on the most famous Psychic Friends Network.
ZVV Media Partners recently purchased Lomotif, an abbreviated video platform with over 31 million monthly active users on the platform (MAU) in June 2021. The intention is to grow its brand to compete with more names. famous like TikTok. .
Vinco also bought Emmersive Entertainment, which focuses on NFTs. The subsidiary recently released an NFT album by Canadian rapper Tory Lanez. There was a hard limit of 1 million albums sold with accompanying artwork at $ 1 each. The album is sold out. Users who originally bought it can now resell it for a profit. Vinco will be limited in what he can get due to his original royalty agreement with the artist. But these moves attract the casual investor.
This brings us to a very good point. Most investors interested in BBIG stocks are those looking for short-term profits. Buzzwords will attract them, making the stock susceptible to any PR or positive news.
NFTs take over and BBIG Stock reap the benefits
Over the past few years, we’ve seen a massive shift in the way people invest their hard-earned capital. After the 2007-2008 stock market crash, many investors became skeptical. However, after the longest bull market in history, investor confidence has returned, and you can see it with the speculative bubble that we see in several assets.
Against this backdrop, it seems like not a day goes by without hearing about another new collectible NFT that’s sold for millions of dollars. Cryptocurrencies and blockchain were already concepts the investment world struggled with, with these digital assets.
Michael Burry, the former big boss of Scion Capital who managed to profit by bypassing the real estate market in anticipation of the 2008 financial crisis, is a notable critic of the NFT space. He replaced the header of his Twitter profile with a screenshot of the following quote: âNFTs exist so crypto scammers can have a new kind of bean to sell for real money, and pretend they don’t sell magic beans. “
NFTs are extremely speculative. This is true for companies connected to space, like Vinco Ventures. Using the assets acquired in the buyout of Emmersive Entertainment, he created an E-NFT.com platform. It is a dedicated streaming service for NFT gaming that aims to protect artists from exploitation. It’s a big selling point. The NFT space is full of crooks and spammers who peddle the work of others without their permission and without notice.
However, NFTs remain a very volatile asset class. Yes, you could say the same for cryptocurrency, but at least there you have multiple use cases and can trade them.
Evolve to new heights
Given the hysteria surrounding NFTs, you will see short term gains with BBIG stocks. Also, as my colleague Mark Hake pointed out in his article, the value of the Lomotif brand is not fully reflected in the share price. Under these circumstances, buying a small number of stocks will not hurt. Since this is the only pure NFT game out there.
Crypto mining actions and Bitcoin (CCC:BTC-USD) ETFs have done very well in recent months, mainly because people want to hedge their risk when investing in this space. With that in mind, it should come as no surprise that this stock can triple in a matter of weeks.
However, devoting a large portion of your portfolio to it is not a great investment strategy. It could prove to be very costly.
At the date of publication, Faizan Farooque did not hold (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Faizan Farooque is a contributing author of InvestorPlace.com and many other financial sites. Faizan has several years of stock market analysis experience and was a former data reporter at S&P Global Market Intelligence. His passion is helping the average investor make more informed decisions about their portfolio. Faizan does not directly own the securities mentioned above.