Genius Brands International Inc GNUS has been one of the hottest stocks in the market over the past three months, gaining more than 2,000%. Monday will be the biggest day of the year for the children’s entertainment company, and expectations are extremely high.
What Happened: On Monday, Genius Brands will launch its “Kartoon Channel!” which will be available on the popular streaming platforms of Amazon.com, Inc. AMZN, Apple, Inc. AAPL, Comcast Corporation CMCSA.
In addition, Genius Brands announced on Monday former action star and California governor Arnold Schwarzenegger is making a significant investment in the company.
Why It’s Important: Genius Brands has said its initial launch of “Kartoon Channel!” will make the channel available to more than 100 million U.S. households and 200 million mobile device users. “Kartoon Channel!” will initially include 1,000 episodes of family-friendly educational content for kids, and Genius has said an additional 3,000 episodes of premium content will be produced and rolled out throughout June and July.
Schwarzenegger is starring and co-producing the new animated Genius show “Stan Lee's Superhero Kindergarten.” The show is being co-produced by Alibaba Group Holding Ltd - ADR BABA and will launch on Amazon Prime in 2021.
On Monday, Genius announced Schwarzenegger has opted to receive warrants to purchase shares of Genius stock as part of his advance against his profit participation in the show.
“I am honored to help realize Stan's vision of creating a children's cartoon series that not only entertains with superhero adventures, but also imparts valuable lessons about the importance of health, exercise, nutrition, anti-bullying, and diversity,” Schwarzenegger said.
The market initially reacted positively to the news, sending Genius shares higher by 18.7% on Monday morning.
Benzinga’s Take: Given Genius’ insane run in 2020, investors may want to at least consider taking profits on some of their positions following Monday morning’s jump.
In May, the company reported a 42% increase in losses from operations in the first quarter, and expectations may be so high at this point that the company’s next earnings report is a sell-the-news event no matter how successful its “Kartoon Channel!” launch actually is.
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