One of the most popular stocks of fall 2021 has done a great job generating media coverage. Unfortunately, it hasn’t done such a good job keeping share prices in the green. Vinco Ventures (NASDAQ:BBIG) has continued to ride the wave generated by its meme stock status. However, it hasn’t stopped the turbulence that it has seen over the past six months. Now, it’s 2022, and Vinco has a new catalyst on the horizon. It sent shares shooting up yesterday, but today BBIG stock is back in the red. Even as the market braces for something it has been waiting on for months, plenty of questions remain.
What’s Happening With BBIG Stock
Much of the buzz surrounding Vinco lately has been its plans to move forward with plans for its Cryptyde spinoff. The company has been planning for months to have Cryptyde trade independently on the Nasdaq under the symbol TYDE. Yesterday, it was announced that Vinco had filed with the U.S. Securities and Exchange Commission (SEC) to move ahead with this plan. Today, the company released a statement announcing that it had entered into “definitive agreements for a debt and common equity raise of $42 million.”
Yesterday’s news sent BBIG stock shooting up 18%. However, markets haven’t been so kind to the company today. As of this writing. BBIG stock is down more than 7% for the day. While it’s still in the green by 13% for the week, today’s decline isn’t making investors happy. While BBIG is no stranger to turbulence, it’s worth a closer look into what we can expect as it moves forward.
Why It Matters
Where does the $42 million figure come from? As the statement summarizes, the company expects to see $33.3 million in secured convertible senior notes to an institutional investor for $30 million. They will mature in 2025 unless they have been converted or redeemed before. The raising of capital doesn’t stop there, though. Vinco has entered into an additional agreement to sell 1.5 million shares of common stock to an institutional investor at of $8 per share.
Cryptyde’s leadership is quite happy with this decision. In the statement, President and CEO Brian McFadden noted that the company believes that the generated capital will allow the company to “scale its business model at an expedited pace without sacrificing shareholder value” following the spinoff. He added that the company is focusing its work in the spaces of Web 3.0 and blockchain technology.
For a company seeking to help a subsidiary grow and become profitable on its own, this decision certainly makes sense. As InvestorPlace’s Eddie Pan reports, Vinco already has several prominent institutional investors, the five largest of whom opted to increase their positions last year. Vinco clearly won’t have trouble finding investors who want to buy big this time around.
What It Means
The turbulence that BBIG stock has experienced has certainly shaken investor confidence over the past year. That said, the investors who matter still seem to be fully on board. It also seems as though we are finally about to see Cryptyde start trading. There’s no doubt that the spinoff has potential to stand on its own in a rapidly expanding space. The only question is, how well equipped is it to do so?
As has been the case with Vinco for months, all we can do is watch and wait. Last week, though, InvestorPlace’s Louis Navellier called BBIG stock a “speculative growth play” that should still be on investors’ watch lists. If Cryptyde finally does spin off into a publicly traded company, it could finally help Vinco achieve sustainable growth.
On the date of publication, Samuel O’Brient 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.