Today, Vinco Ventures (NASDAQ:BBIG) is once again in focus for investors. Indeed, the rise of BBIG stock in recent weeks has been remarkable to watch. A stock that was trading at less than $2.50 per share in mid-August, surged to be a five-bagger in a few weeks, only to fall back to $5 per share. Today, a 7% rise has many investors once again hopeful this stock can go on another run.
As with various impressive meme rallies of late, Vinco Ventures has been a top short-squeeze candidate. Retail investors have piled into this company because of its high short interest and borrow-fee rates. This company has made the top five short-squeeze stocks on our weekly list a number of times over the past month. Accordingly, the level of interest for investors looking for the next squeeze play appears to remain intact.
Today, investors in Vinco Ventures have another reason to be bullish on this stock. Let’s dive into what’s driving BBIG stock higher today.
BBIG Stock Cruising Higher on Acquisition Deal
Today, Vinco Ventures announced that through its joint venture with ZASH Global Media, the companies would be acquiring AdRizer. A letter of intent has been signed to acquire this publisher and analytics producer for $108 million. This will be a cash and stock deal, with $25 million in cash provided by the joint venture and the remaining stock issued by ZASH. Accordingly, for investors in BBIG stock, it appears direct dilution will be avoided.
Indeed, for many companies, a $100 million acquisition isn’t anything to write home about. However, given Vinco Ventures’ market capitalization of $500 million, this deal size is significant.
Today, it appears investors like what they see with this deal.
AdRizer expects to remain on a run rate of approximately $62 million in revenue per year. Accordingly, at a price of $108 million, Vinco Ventures is picking up this growth business for less than two times sales. As far as the valuation of this deal goes, it appears investors are giving Vinco Ventures and ZASH gold stars.
As Vinco Ventures attempts to grow its market share in the ad-tech space, this deal certainly could propel the company’s growth rate forward. Accordingly, this deal looks like a home run, at least on its face, right now.
On the date of publication, Chris MacDonald 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.
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