Greenwich-based hedge fund Hudson Bay Capital Management was the largest shareholder of Vinco Ventures (NASDAQ:BBIG) as of Dec. 31. It owned the equivalent of 15.13 million shares of BBIG stock.
Source: vincoventures.com
If you are a limited partner of the hedge fund, you can thank your lucky stars that BBIG only represents a tiny portion of its $9.8 billion portfolio.
Who is Hudson Bay Capital and what is it doing with a ragtag outfit like Vinco? Quite honestly, I couldn’t tell you. However, one thing I can say with great certainty is that the hedge fund’s Chief Executive Officer Sander Gerber is not losing sleep over it.
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Here is why.
BBIG Stock Down 83% Since 52-Week High
Over the past year, BBIG stock has lost 10.6% of its value year-to-date. However, as recently as September 2021, it was trading at a 52-week high of $12.49 and had a market capitalization of $1.7 billion.
Based on Hudson Bay Capital’s third-quarter 2021 13F, its Vinco stake was worth $50.4 million, or $5.74 a share. That is based on 8.81 million shares held by the hedge fund as of Sep. 30, 2021. That represented 0.7% of Hudson Bay Capital’s $7.4 billion portfolio.
However, if you exclude many of the hedge fund’s convertible notes held, Vinco was one of its largest positions. It also held a ton of special purpose acquisition companies (SPACs). They’ve become popular with hedge fund investors as a safe way to park money. But I digress.
InvestorPlace’s Ian Bezek recently discussed how Vinco Ventures Is Still a Confusing Mess. My colleague was talking about all the company’s moving pieces not adding up to profits. He believes, as I do, that Vinco has little chance of success. He wrote:
“Vinco Ventures is working on a lot of interesting projects. However, the odds of Vinco ultimately succeeding are low. Anytime you see a company change its name, alter its business model, and being led by executive who were involved with failed penny stocks, the company’s odds of rewarding its shareholders aren’t good.”
When I last wrote about Vinco in January, I suggested that its stock could still be expensive under $1, so I get where my colleague is coming from. Vinco is a dog with fleas.
Here is how I concluded my commentary about Vinco:
“The lack of focus and a relatable story will ultimately kill BBIG stock if it hasn’t already. It’s cheap for a reason. I would not touch this falling knife. It’s not a business. It’s an exercise in paper shuffling.”
The Hudson Bay Pieces Don’t Add Up
As I look through Hudson Bay Capital’s last three 13F filings, I’m left scratching my head.