Vinco Ventures (BBIG 7.67%) shareholders beat a declining market on Monday, with shares rising 7% by 11 a.m. ET as the broader S&P 500 fell by more than 1%.
The digital content sharing acquisition specialist announced that it had raised more cash through the sale of more stock. The rally added to significant short-term gains, as the stock has more than doubled so far in 2021.
In a filing with the Securities and Exchange Commission, Vinco Ventures said it had reached a deal to sell more warrants (or the right to buy the stock in the future), to an institutional investor. The price was set at $3.27 per share and the size of the deal was significant given its relatively small market capitalization. Vinco Ventures said it has raised nearly $40 million from the deal after deducting expenses.
Management is planning to use the cash in part to help fund more acquisitions like its recent purchase of AdRizer, which it bought for $108 million earlier in 2021.
Vinco Ventures' business model relies on an aggressive acquisition, and so it's good news for shareholders that the company has secured more resources to direct toward crafting a portfolio of digital assets in the streaming and non-fungible token spaces. However, investors have to balance that positive against the fact that a rising pool of outstanding stock dilutes their relative ownership, and thus pressures core metrics like per-share earnings.