On July 14, Vinco Ventures (OTCMKTS:BBIG) received a delinquency notice from the Nasdaq. As InvestorPlace’s Eddie Pan reported, this grim warning came with very bad news. Specifically, Nasdaq warned that Vinco was in “noncompliance with Nasdaq’s independent director, audit, and compensation committee requirements” following three resignations from its Board of Directors.
To trade on the Nasdaq, companies are required to maintain a specific number of independent directors. Vinco Ventures clearly did not take action to rectify its noncompliance with this rule, as today brought news that Nasdaq had suspended BBIG stock.
As of now, Vinco shares can be traded over-the-counter (OTC), although this may not be the time to buy. Shares of BBIG stock have plunged more than 60% today and they don’t appear to be slowing down.
What Does This Mean for BBIG Stock
Typically, this type of news from an exchange doesn’t help stock prices. But as Pan also notes, the recent delinquency notice actually sent BBIG stock up. This recent surge had the markings of “Hail Mary” play charged with hype from retail investors.
That said, Vinco’s recent suspension has still cast a dark shadow over the stock’s future. BBIG has come crashing back down to earth today and is currently in a race to the bottom. Trading at less than $2 now, the stock doesn’t have much further to fall but could continue to plunge.
As of now, the future of Vinco Ventures is highly uncertain. Still, it’s clear that things don’t look good for BBIG stock. For one, the company’s history is also working against it; Vinco has received multiple warnings from Nasdaq in the past for similar failures to comply. Pan reports:
“Last November, the company received a notice for failing to file its quarterly 10-Q for the period ended Sept. 30 in a timely manner. In January, Vinco received another notice for failing to hold an annual meeting of shareholders within 12 months after the fiscal year end ended Dec. 31, 2021.”
That’s not even where the company’s problems stop. Back in April, Nasdaq issued another notice when Vinco failed to file its important 10-K form on time. Throughout the year, experts have wondered if BBIG stock could avoid being delisted. While the company has hung on for longer than many may have expected, Vinco is likely too unstable to regain and maintain Nasdaq compliance.
Trading on an OTC exchange is typically a last-resort move for companies that can’t make it on a major exchange like the Nasdaq or New York Stock Exchange. Once downgraded to OTC, stocks are often highly volatile and struggle to demonstrate sustainable growth. Anyone who doubts this should consider how unstable fellow meme stock Bed Bath & Beyond (OTCMKTS:BBBYQ) has been since being delisted. All signs now point to BBIG facing a similar fate.
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On the date of publication, Samuel O’Brient did not hold (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.
