On Tuesday, shares of kids’ entertainment content developer Genius Brand (NASDAQ: GNUS) were down. It is continuously going downward slide. The company (GNUS) stock was down more than 17%. (GNUS) Company has been destroying investors capital. It has never had a consistent source of revenue. Genius Brand issued a press release and update its balance sheet, GNUS company has enough cash on its balance sheet to meet its obligations and operate on its business.
GNUS first quarter Q1 reports.
- GNUS: Q1 GAAP EPS of $0.23
- Revenue: $o.33M
Source Business Quant.
In 2020, Genius Brand Stock went on an epic run. On 3 June 2020, The kids’ entertainment company’s shares had risen a staggering 2,800%. That time, shares have had half their value. GNUS Brand has become a battleground stock.
The Genius Brand (GNUS) has issued a response to the short-sellers’ report, and pointing out the strength of its balance sheet, with a net cash position that company said, For next five year, it would supports operations and develop new content. And management highlighted the upcoming launch of a company’s new free, ad-supported digital service, and its cartoon channel. It’s scheduled to go live on June 15 and to be available in more than 100 million US TV households and 200 million mobile devices. And Genius Brand toy deal with Mattel for its Rainbow Rangers series, In August it will hit Walmart stores.
According to Hindenburg Research, Recently, The company has raised capital at a level far below its current price, and the management saying that shares are trading now at unjustified levels based on the GNUS’s current sales and mounting losses in recent year. The bears also point to recent insider selling – In the upcoming weeks, millions of more shares from financing rounds are set to become free to trade, that can put pressure on company (GNUS) stock price.
Hindenburg Research introduces some valid points about the stock. Company’s shares have become expensive, by any valuation metric. and the kid’s media company, that doesn’t have a good track record of delivering profitable results. The Genius Brand (GNUS) has never had a profitable year in the past decade and only has one-quarter of positive net income. But investors say Genius Brand (GNUS) has a very bright future and they are not betting on the past of the company. The Genius Brand (GNUS) has added a new executive with a good track record to run its upcoming Kartoon Channel, that will generate revenue from advertisement and offer free content.
Company’s (GNUS) sales and lack of profits don’t support its stock’s current valuation. And there are no assurances that new Kartoon Channel will be a success. A free, ad-supported model has potential, there are many low and no-cost options present that kids and their parents can choose from, like Netflix ($8.99 per month), Disney ($6.99), Prime Video – that is included in Amazon Prime memberships and YouTube, which is totally free.