Shares of Genius Brands International Inc GNUS spiked more than 11% on Friday afternoon following a since-deleted report of a potential tie-up with Walt Disney Co DIS.
What Happened: DisneyGuide reported Disney will acquire a 5% stake in POW! Entertainment. POW! and its library of Stan Lee-created characters struck a partnership with Genius Brands on July 6.
Genius Brands CEO Andy Heyward told Benzinga this deal never occurred. Genius Brands owns the rights to Stan Lee Image jointly with POW! and Genius Brands is a controlling holder of the Stan Lee Universe. Meanwhile, DisneyGuide removed its article from publication shortly following its publication.
Why It's Important: Genius acquired exclusive worldwide rights to use Stan Lee's name, physical likeness, and signature from POW! in addition to licensing rights to his name and more than 100 of POW's original IPs.
Genius shares have taken off in 2020 due to excitement surrounding the recent launch of Kartoon Channel, and Heyward said there are likely multiple market dynamics driving the stock’s extreme volatility.
“A lot of people had a basis at 21 cents. There was some profit-taking. There was of course a lot of shorting going on. As a CEO, I can’t explain why stocks go up and down. I have some ideas, but it’s really not what I do. I make cartoons,” Heyward told Benzinga's PreMarket Prep earlier this week.
GNUS Price Action: Genius Brands traded around $2.36 at time of publication. The stock popped and dropped from $2.32 to $2.72 when the DisneyGuide report first hit newswires.
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