A publicly traded media venture with ties to MoviePass’ former chairman has been suspended from Nasdaq and its stock is in free fall

  • Embattled digital-media company Vinco Ventures has been suspended by Nasdaq after a board exodus.
  • It became a meme stock in 2021 after teaming up with the ex-chairman of MoviePass and touting buzzy acquisitions.
  • Some of those deals have since faced hurdles and the stock has plummeted.

Vinco Ventures, the publicly traded media venture with ties to ex-MoviePass chairman Ted Farnsworth, is facing delisting from the Nasdaq after a series of high-profile deals fell through and a board exodus.

The stock exchange suspended Vinco shares, which trade under the ticker BBIG, on Friday after the company was previously warned for failing to comply with Nasdaq’s requirements for an independent director, audit committee, and compensation committee. In late June, three of the company’s five board members resigned. The stock has dropped 66% since Friday. On Wednesday afternoon, it was trading over the counter at around $0.63.

“The fact that we’ve gone from Nasdaq to OTC is terrible,” investor Shadwrick Vick, also known as @RetailRudy, told Insider, referring to over-the-counter securities trading that takes place outside of official stock exchanges and directly between two parties through a broker-dealer. He is a member of a shareholder group that previously sued Farnsworth and several other current and former Vinco executives.

Vick stated that Vinco’s credibility would suffer if he was delisted. It would also limit the company’s access to capital because major mutual funds typically do not invest in over-the-counter markets, and OTC does not provide the global reach of Nasdaq.

“We lose all those investors who can provide capital, so staying on Nasdaq is critical,” he said.

Farnsworth, the former MoviePass chairman, announced plans for a reverse merger between Vinco and his new venture, Zash Global Media and Entertainment, in early 2021, ushering in a new era for the company. According to the announcement, the combined company would “invest in, acquire, and merge” media, entertainment, and content-focused technology companies.

Vinco has since boasted deals such as its 2021 acquisition of the short-form video platform Lomotif, which the company positioned as a TikTok rival and would increase the combined companies’ value to $5 billion, and its 2022 acquisition of ad platform AdRizer, as well as its joint venture plan to buy the National Enquirer.

The National Enquirer deal, however, fell through in June, according to The Wall Street Journal. And, as of this writing, the Lomotif app did not appear to be operational; Vick, the investor, told Insider that the app had been down “for months.”

Vinco shares have dropped 99% since their recent high in September 2021, when meme-stock investors helped propel the stock.

Vinco’s suspension from the Nasdaq is not his first brush with delisting. The stock exchange previously warned the company when it failed to file its quarterly financials for Q2 and Q3 2022, as well as its annual report for that year, on time, and when it failed to hold its most recent annual shareholder meeting on time.

According to a legal filing citing the exchange’s listing rules, Vinco now has until Friday, August 4, to regain compliance with Nasdaq’s rules or request a hearings panel review — or it will be delisted.

Farnsworth and other current and former Vinco executives are being sued in Clark County, Nevada, where the company is registered. (According to the company’s most recent proxy statement, Farnsworth no longer appears to have an official role at the company, though he is still the controlling shareholder of its Zash subsidiary.)

One of those lawsuits is from a shareholder group that includes Vick and is attempting to save Vinco’s Nasdaq listing. The shareholders filed an emergency motion on Monday, requesting that the judge hear their case by Thursday in order to avoid delisting. They propose three alternatives: an emergency motion to appoint custodians for the company, compliance with Nasdaq Rules to avoid delisting, or appointing a receiver.

“We just want to get the bad actors out and put good actors in,” Vick explained.

Farnsworth, along with MoviePass’s former CEO Mitch Lowe, was charged with securities fraud last year. Farnsworth and Lowe, according to the indictment, “engaged in a scheme to defraud investors through materially false and misleading representations relating to HMNY and MoviePass’s business and operations in order to artificially inflate the price of HMNY’s stock and attract new investors.”

Farnsworth oversaw the 2017 acquisition of MoviePass as chairman and CEO of Helios & Matheson Analytics, or HMNY for short. Under the direction of Farnsworth and Lowe, the company launched a $9.95-per-month subscription service that allowed people to watch one movie per day. MoviePass had over 3 million subscribers in less than a year. However, the company lost hundreds of millions of dollars and declared bankruptcy in 2020.

In a statement issued in November, Farnsworth’s spokesman, Chris Bond, said, “Mr. Farnsworth is confident that the facts will demonstrate that he has acted in good faith, and his legal team intends to contest the allegations in the indictment until his vindication is achieved.”

Vinco did not respond to Insider’s inquiry about the Nasdaq suspension.

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