Genius Brands International (NASDAQ: GNUS) finished the day up 7.3% on Monday, closing at $0.805 per share. The penny stock had been up 13% at around 1 p.m. ET to $0.85 before dropping. The stock is down about 23% year to date.
Genius Brands is a childrenʻs entertainment and media company, best known for its streaming Kartoon Channel, shows like Rainbow Rangers, and the rights to Stan Leeʻs name as well as the intellectual property of Leeʻs non-Marvel characters. These are not the characters you may know and love from the big screen but ones you are probably not familiar with.
The company has struggled to generate earnings but saw a 35% increase in revenue in the first quarter year over year to $23 million. Net income was just $1.3 million, about flat year over year.
Genius Brands got a boost in May when the company signed a 20-year deal with Marvel Studios, owned by Walt Disney (NYSE: DIS), to license the name and likeness of Stan Lee to Marvel Studios for future films and television shows and in Disney theme parks.
Genius Brands reports Q2 earnings on Aug. 15, so investors should be watching to see if there is any impact from the Stan Lee licensing deal. Also, the company is rolling out some new shows in the fall, including Shaqʻs Garage, starring Shaquille OʻNeal, and Wolfgang Puckʻs Secret Chef Academy.
Genius has been saddled with high expenses and has not consistently delivered profits for investors. It has some solid intellectual property, but until it can turn that into earnings, it warrants a wait-and-see approach.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Roku and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.