I see from recent media reports that meme stocks are back, which I guess means that people feel they didn’t lose enough money in crypto this year. Anyway, it’s Friday and it’s a slow news week at the SEC, so the resurgence of meme stocks gives me an excuse to recount the ongoing wild ride of a meme stock known as Vinco Ventures.
Vinco Ventures commercializes digital media and content technologies, and over the past month, it’s been the subject of some very bizarre boardroom shenanigans. They began with the filing of this Form 8-K announcing that the board had appointed Theodore Farnsworth to serve as Co-CEO alongside the company’s current CEO, Lisa King. But according to a subsequent press release, that’s not what happened. That press release – which you really need to read in its entirety – announced that Farnsworth & King had been terminated, and included this nugget:
On July 14, 2022, Ms. King authorized the filing of a Current Report on Form 8-K that incorrectly stated Mr. Farnsworth had been appointed as the Company’s Co-CEO despite being advised that the information contained in the Form 8-K was incorrect and based on an invalid Board meeting (the “First Incorrect 8-K”). The Company attempted to file a Current Report on Form 8-K by the end of the day on July 14, 2022 to correct the First Incorrect 8-K, but this attempted Securities and Exchange Commission (“SEC”) filing was blocked by certain members of the Farnsworth Group, even though Mr. Farnsworth was not legally appointed as the Company’s Co-CEO at the time.
The press release goes on to recount management reshufflings that occurred at two subsequent board meetings. When the dust settled, the press release says that Farnsworth remained a Co-CEO, but King was moved to another position and a new Co-CEO, John Colucci, was appointed to serve with him. The board purportedly directed the Co-CEOs to file a corrective 8-K, but the press release says that didn’t happen. Instead, the release claims that this happened:
On July 22, 2022, without informing anyone at the Company or the Board, the Company believes that certain members [of the] Farnsworth Group authorized the filing of a Current Report on Form 8-K signed by Mr. Farnsworth that, once again, materially misrepresented the facts and chain of events (the “Second Incorrect Form 8-K”).
Here’s that Form 8-K. In any event, the press release said that the board subsequently terminated Farnsworth and his pals & promised an 8-K filing. The only problem was that “[t]he Company’s SEC codes and SEC filings by the Company have been blocked by the Farnsworth Group,” so that Form 8-K couldn’t filed until those issues were resolved.
Apparently, they still haven’t been completely resolved, because the only 8-K filed after this press release relates to an announcement that the company’s shareholder meeting was being postponed. However, on Wednesday, the company announced that a Nevada court had entered a TRO barring the Farnsworth Group from, among other things, “holding themselves out internally or externally as employed by the Company or acting on its behalf in any capacity.” The court also ordered the Farnsworth Group to turn over the company’s SEC codes.
In its press release, the company claimed that it had “thwarted a hostile takeover attempt for no consideration by the Farnsworth Group.” Over the years, I’ve seen a lot of people try to take control of a lot of public companies in a lot of different ways, but allegedly swiping EDGAR codes as a hostile takeover strategy is a new one on me. If you find all of this very confusing, you’re not alone. I do too, and apparently, so does Nasdaq, which halted trading in the stock a week ago. The meme stock apes, however, continue to have faith that this particular stonk is “goin’ to the moon!”
– John Jenkins