Vinco Ventures (BBIG) stock fell more than 4 percent in morning trading on June 25, which extended its 10 percent decline on June 24. What’s going on and what’s the status of Vinco Ventures’s merger with Zash Global Media and Entertainment?
Vinco Ventures engages in the business of acquiring digital media assets. In the first quarter, the company’s revenue jumped more than 30 percent YoY to $2.6 million. However, the company suffered a loss of $62 million.
Vinco Ventures-Zash merger update
In January, Vinco announced a merger deal with Zash, which is a digital content distribution company. Zash aims to build what it describes as a "virtual" Hollywood. Its technology helps digital content creators and online influencers expand their brands globally. The business was started by former MoviePass chairman Ted Farnsworth and Jaeson Ma, an early investor in Musical.ly, which later became TikTok.
Recently, Vinco issued a series of updates regarding its pending merger with Zash. In one of the Zash merger updates, Vinco said that it was setting up a joint venture business called ZVV Media Partners. Through the joint venture, Vinco and Zash want to acquire TikTok rival Lomotif.
In another update, Vinco said the Zash merger proposal would be put to its shareholders for approval by July 15. Before then, the parties planned to sign a final merger agreement by June 24.
Vinco Ventures spinning out Emmersive Entertainment unit
As investors await the latest news on the Zash merger update, Vinco announced the spin-off of its Emmersive Entertainment unit. That move appeared to startle investors, which caused BBIG stock to fall following the spin-off announcement.
Vinco plans to separate the Emmersive Entertainment unit into a standalone public company where its existing shareholders will have a stake. It expects to complete the transaction in the third quarter and its chief strategy officer Brian McFadden will lead that business.
According to McFadden, spinning off the Emmersive Entertainment unit is the icing on the cake for Vinco shareholders if considered in the whole arrangement regarding the Zash merger.
Is Vinco Ventures (BBIG) stock a buy before the Zash merger?
The Vinco-Zash merger deal now looks broader than originally announced with the acquisition of TikTok competitor Lomotif and the Emmersive Entertainment spin-off. That deal is also progressing toward the finish line. The shareholder vote on the merger is planned for next month.
It has been a great time being a Vinco shareholder in 2021. Even with the recent fall following the unit spin-off announcement, BBIG stock is still up more than 200 percent YTD. The S&P 500 Index is only up 14 percent over the same period.
There's a chance that BBIG stock could still swing wildly before the Zash merger closes. Bargain hunters would be excited at the opportunity to enter the stock now at nearly 60 percent below its January peak. Also, BBIG stock is one of the NTF plays.