What happened 

Shares of Genius Brands International (NASDAQ:GNUS) plummeted on Friday, following bearish comments by Citron Research. By the close of trading, Genius Brands' stock was down more than 13% after falling as much as 27% earlier in the day. 

So what 

Genius Brands stock went on an epic run in 2020. By June 3, the kids' entertainment company's shares had risen an astounding 2,800%. The gains were due in part to the anticipated launch of the company's new free, ad-supported digital network, the Kartoon Channel! 

In a letter to shareholders, CEO Andy Heyward went so far as to liken the service to a "Netflix for kids" and an "economic vaccine for COVID-19." Heyward also boasted of a toy deal with Mattel for Genius Brands' Rainbow Rangers series, which he said would be available in Walmart stores by August.

A grizzly bear.

The bears aren't buying the run in Genius Brands stock. Image source: Getty Images.

The steep ascent of Genius Brands stock caught the attention of Citron, who noted in a tweet that the company's market cap had reached into the hundreds of millions of dollars, even though it generated only about $5 million in revenue over the past 12 months. In turn, Citron believes Genius Brands' stock price is headed to "$1...fast." Shares closed at $5.94 on Friday.

Now what

Heyward claims that the Kartoon Channel! will be available in "over 100 million U.S. television households, and over 200 million mobile devices" when it launches on June 15. It will be interesting to see what kind of response it gets from viewers at that time.

Many bears are already betting against the company's success. Short interest in Genius Brands rose to more than 44% of its stock float on Thursday, even as the fees to short the shares soared, according to MarketWatch. That's an ominous sign, and it could portend a steep fall in Genius Brands' share price.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.