Small-Cap Tech Stocks Continue Heating Up Markets
Are tech penny stocks on your radar yet? Despite what’s going on in the broader markets, these small-cap names remain red hot. Whether we’re talking about the new trend in NFT stocks or the continued interest in fintech, penny stocks are at the heart of it all. But rightfully so. Regardless of Monday’s session on the 22nd, small-cap stocks have greatly outperformed the broader markets.
Let’s compare a few of the benchmark ETFs: The S&P 500 ETF (NYSE: SPY), Invesco Nasdaq ETF (NASDAQ: QQQ), and the Russell 2000 Small-Cap ETF (NYSE: IWM). Year-to-date, the figures are glaring. As of Monday’s close, the SPY was up 4.6%, and the QQQ had finally gone positive for the year, up 1.1%. Then we’ve got the Russell. Year-to-date, shares of the IWM were up 13.8%, up more than the SPY and QQQ combined.
One of the biggest things that have helped build bullish sentiment in the market has been the influx of retail traders. There’s more than just GameStop that has been the target of massive retail buying.
In general, the volatility has attracted so many young “Robinhood traders” to the stock market over the last year. In fact, if you look at some of the brokerage growth statistics from 2020, you’ll see what I mean. Some estimates cite that Robinhood alone added 5 million new accounts in the first 9 months of the year, last year. The vast majority were just getting their feet wet in the market, which has now evolved in 2021, as I’m sure you’ve already seen.
Hot Penny Stocks To Watch Right Now
- Vinco Ventures Inc. (NASDAQ: BBIG)
- Allied Esports Entertainment Inc. (NASDAQ: AESE)
- Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT)
- Color Star Technology Co. Ltd. (NASDAQ: CSCW)
Hot Penny Stocks To Watch #1: Vinco Ventures Inc.
Vinco has best been known for its relationship to the top-rated social media video app, TikTok. The company’s partner Zash Global Media and Entertainment, turned heads this quarter. Zash is led by co-founders Ted Farnsworth, early Musical.ly (now TikTok) investor Jaeson Ma, and early Triller board member Vincent Butta.
The story gets interesting because Zash entered into a definitive agreement to acquire a majority controlling interest in Lomotif Private Limited. That’s a Singapore-based video-sharing social networking platform that the company says could be a rival to TikTok and Kuaishou. The closing of the Lomotif acquisition by ZASH is scheduled to occur in tandem with the closing of ZASH’s merger and business combination with Vinco Ventures, Inc.
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There haven’t been any further updates recently. However, the recent market trend suggests that speculation may have played a role. Since March 5th, BBIG stock has risen from lows of $2.16 to highs this week of $3.39.
#2: Allied Esports Entertainment Inc.
Another one of the technology penny stocks that have been on fire recently is Allied Esports. AESE stock had been on the move even before this month thanks to a proposed buyout offer of its World Poker Tour assets. This deal was with Element Partners, LLC. and was valued at more than $78 million. But recently, a bidding war had begun with Bally’s Corporation (NYSE: BALY) offering to buy Allied for $100 million.
This week, Allied continued the open dialogue with the market, giving another key update. Allied announced that it entered into a revised stock purchase agreement with Element. This time it was to sell its World Poker Tour assets for $90.5 million, all payable at closing.
Tuesday, the company announced that it teamed up with Xsens, a global leader in inertial motion capture products. Allied aims to bring live animated casters to a professional esports tournament production for the first time.
“Allied Esports is taking live esports broadcasting to the next level by adding live animated casters to the tournaments,” said Rob Löring, Business Director at Xsens. “This is very challenging, and in such a demanding technical environment, Xsens is the only solution to give a reliable performance.”
#3: Blue Hat Interactive Entertainment Technology
Last time we talked about Blue Hat, it was right after the Roblox IPO, which triggered a pop in certain tech stocks. The company itself provides augmented reality interactive entertainment games. But it has been very sparse with news headlines. This week, Blue Hat made its first major announcement in over a month.
The company signed a 3-year framework agreement with Kingsoft Cloud Holdings Limited (NASDAQ: KC). Kingsoft specializes in cloud services in China. Over the course of the last few months, Blue Hat said that it has been providing services to Kingsoft Cloud’s platform. This was in an initial assessment period and included mainframe hosting, system maintenance, and troubleshooting.
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Xiaodong Chen, CEO of Blue Hat, said, “We are pleased to be recognized as a valued partner by Kingsoft Cloud…and look forward to working with them in offering our marketing and integrated solutions to larger business clients…Through this cooperation, we will be able to increase our brand awareness and customer base for our mobile and gaming business.”
Given the climate in tech stocks right now, BHAT could be one of the names to watch.
#4: Color Star Technology Co. Ltd.
There’s been a big boost of attention on entertainment penny stocks recently. Not just content providers but ones offering a tech spin to their platform. Earlier this morning, a former entertainment penny stock, Dolphin Entertainment (NASDAQ: DLPN) announced that it would be launching an NFT division. Of course, you can imagine what happened once that news hit. But as I’ve always asked in the past, is it sustainable?
The future will determine that outcome. However, it has seemed to have acted as a catalyst for other entertainment tech stocks. Color Star Technology specializes in entertainment and education to meet the growing demand for virtual engagement in a post-pandemic world. The curriculum developed by the company includes a variety of options. Music, animation, sports, film and television, life skills, and more are covered.
Color Star most recently inked a deal with Doman (HK) Ltd., where blockchain technology support will be provided to Color Star’s interactive entertainment platform software, Color World APP. And here’s where some NFT speculation could have begun to stem from. In the press release last week, the company said:
“A platform user who is currently unknown, but has strong creative abilities, might use this platform to help showcase his hidden talents; the copyright exchange platform of the Color Star APP may quickly match him to those who can appreciate and understand the value of his work…Through this platform, people may find their favorite works in one stop, and as the Color Star APP becomes integrated with AR technology, it should turn copyrights from plain text into vivid presentation, thereby allowing everyone to appreciate the talented works of others.“
While this seems to be speculation right now, it may be one of the factors to keep in mind amid all of the NFT hype going on right now.
