Vinco Ventures, Inc. (NASDAQ: BBIG), selective acquisitions company primarily focusing on digitalmedia and content technologies is looking forward to close its merger deal with Lomotif. Lomotif, which is similar to TikTok app is a developer of a social video application designed to make music videos with friends.
The company’s application offers instant edits with clips, stickers, filters and titles, adding music tracks to video and a reaction GIF to the end of a snap, enabling users to create and share hassle-free videos.The merger is expected to fetch BBIG with immense profits and substantial upside prospect but that could be only papers, though the news did help move the stock a bit higher. However, the happy news did not last long and the shares saw a downfall by 35%.
Catering to one of the most pertinent movements in social media, Lomotif has recently over 31 million monthly active users (MAUs). In addition to this, the company claims to have found that 84% of people were convinced to buy a product or service based on the brand’s video. Thus, with the immense success of Lomotif, it is expected that the merger with Vinco Ventures bear fruits for the latter too, generating advertising revenue. The increasing popularity of Lomotif combined with the low share price and social media fervor of BBIG could be an enormous prospect.
Potentially, that sets up advertising revenue synergies for Lomotif, which in turn bodes well for BBIG stock. By taking more market share from short form video content leaders like TikTok, the competitor brand could dramatically increase its relevance. Combine that with the low share price and social media fervour of BBIG and you could see another massive opportunity.
However, with the fickle nature and oversaturated market of the social media platforms, it could still be a speculative proposition. With more than 100 social media platforms for the users to choose from, Lomotif could quite easily get lost in the list as compared to its big rivals who are going strong in the game. Also, after learning about the financial scarcity of Lomotif, it becomes all the riskier. Further, with the omnipresence of Facebook, the precion of Twitter, Snap’s charming take on short messages, and TitTok’s power to turn individuals to celebrities, until and unless Lomotif has something unique to offer the users, it would not be successful in luring anyone.