One of the stocks to have rallied significantly on Monday was that of children’s entertainment company Genius Brands International Inc (NASDAQ:GNUS). The rally came about after the company made a significant announcement with regard to the expansion of its operations. The company announced the launch of a new toy line and that proved to be a major positive trigger for the stock.
After the announcement was made by the company, the stock rose by as much as 18.5% and in light of such a rally, it could be worthwhile for investors to perhaps take a closer look at Genius Brands. Additionally, it is also important to figure out if it is worthwhile to enter the stock at this point.
The company created a new range of toys based on its own series the Rainbow Rangers and it went on sale at Walmart on Monday. In addition to that, the toys will also be available for purchase on Amazon and Walmart.com. The toys in question are being manufactured by toy industry giant Mattel under the well known Fisher-Price brand.
However, in this regard, it is also necessary to point out that Genius Brand is also working with many manufacturers in order to produce more Rainbow Rangers themed products like apparel and books among others. The company aims to make a launch with a national level marketing campaign.
In the press release from the company, its Chief Executive Officer Andy Heyward stated that the Rainbow Rangers line of toys could end up being one of the breakout hits for the company. In addition to that, many of the company’s partners believe the same with regards to the prospects of the brand. In light of that feedback, the company has decided to launch hundreds of products in a wide range of categories in North America over the course of the next 1 year.
Now when it comes to the Genius Brands stock, investors need to note that it is a small-cap entity and is often known for going through significant swings. For instance, the stock was trading at $.052 back on March 12 but on June 4, the stock price stood at $11.73. It is a telling fact that despite the rally on Monday, the Genius Brands stock is down by as much as 85% from the highs of June 12.
Experts believe that the stock is going to continue to be a highly volatile stock in the coming days. On the other hand, there are two other factors that make the stock an avoidable one. The deal with the Stan Lee Universe remains sketchy since it is not clear how the joint venture is going to help the company’s growth. Additionally, Genius Brands is well known for promising too much and delivering too little. Hence, investors need to be a bit cautious.
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