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This stock has reasonably been the most volatile stock over the past two weeks at the time this is written. I still remember when the stock hit around $11/share due to their $9 million offering of common stock. Of course, this did not last long, and it eventually fell to $2-$3/share. This indicates that many people took their profits, or they decided to short the stock. With the uncertainty of the company, I particularly don’t blame them for doing so.
Today, they will have launched their brand-new streaming platform for kids, called “Kartoon Channel!” This may have a particularly high upside. With several different shows being on the platform, it can be a particularly massive hit with young children. The best part is that their streaming platform is free, meaning parents can have free television for their kids, which is a huge win.
This streaming platform will also have advertisements displayed so that the company can earn some money while making its platform free to the public.
In addition to this, the platform will be displayed on Amazon Prime and in China, displayed on Alibaba. Arnold Schwarzenegger has been announced as an investor in Genius and will star in one of Genius’s new shows, “Stan Lee’s Superhero Kindergarten.”
Everything sounds particularly good, but why did the share price fall so low? Well, just because they are launching a platform for young children, it doesn’t mean that it will go well. There has been much concern over the strength of their balance sheet, as they have a low current ratio, meaning that paying their obligations could be troublesome.
I won’t go full into detail on their balance sheet or other financial statements as you can easily do it yourself and may have different criteria then I would. I will provide a link to where you can analyze their annual reports.
So, let’s say that their financial statements are horrible, is this stock still a buy at this price? Well, it depends if you think the stock will go up over time. I mainly believe their platform launch will cause the stock to rise. Whether it will go down the next day is uncertain.
The way the stock has been so volatile either means day traders are taking advantage of using shorts or the volatility, or that people are not confident in the company.
However, the company particularly has excellent management that has served in the entertainment industry for an extended time. Some of the administration have been apart of Marvel, Fox, and other successful platforms. So, I would not question the management, and if anything, I believe they have a robust reputable platform of executives.
Let’s not forget we are currently amid this pandemic, and a second wave of the virus is not a far reach. If we do reach that state again, this platform could thrive. Many parents will be working from home with their children, and a free streaming platform showing children’s entertainment is just what they may need. So, this platform could benefit from another lockdown due to COVID-19.
It should also be noted that Genius Brands International has a deal with Wal-Mart to sell “Rainbow Rangers“, which is being manufactured by Mattel. The agreement is partaking in August, which could lead to an increase in the share price during that time.
I see two things that can happen with this stock:
- You can buy the stock hoping that it will go up sometime during this summer and sell it for a nice profit.
- Or you can hold this stock for the long-term and hope that it will rise significantly more over time.
It may particularly seem like anyone holding this stock is gambling on the company’s potential, which relies on the success of the company’s streaming platform and quality entertainment.
However, I will be optimistic and say that they do have a bright future. So I would be willing to take the gamble on a stock worth $4/share that brings excellent management, a streaming platform that is free for children, which can thrive if we have a second lockdown due to COVID-19, and the “Rainbow Rangers” merchandise that will be sold in Wal-Mart during August.
Overall, I will give this stock a B.
Although the company may have some red flags waving in the air, I am willing to bet on their potential. As well, I like the news and platforms their content will be displayed on, it has and will reach thousands if not millions of people.
Executives at Genius seem invested in the future, so there’s no reason we can’t be either.
I didn’t want to make this article particularly long, as I wanted to allow you to read our thoughts on Genius Brands International Incorporated quickly. If you are interested in us breaking down the company’s financials, let us know in the comments.
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Disclaimer: I am not a financial advisor. You are trading at your own risk and should consult a financial advisor for any investment decisions. Do your own due diligence when considering investing, and this information is for education/informational purposes only.