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Why Genius Brands Stock Surged Today

By Joe Tenebruso – Updated Aug 3, 2020 at 5:22PM

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It's all sunshine and rainbows for investors in the kids' media company.

What happened 

Shares of Genius Brands International (GNUS 0.54%) jumped 18.5% on Monday after the children's entertainment company announced the launch of a new toy line. 

So what 

The first toys based on Genius Brands' Rainbow Rangers series hit Walmart (WMT 0.05%) shelves today. The toys will also be available on Walmart.com and Amazon.com (AMZN -1.61%).

Genius Brands' Rainbow Rangers characters.

Genius Brands' Rainbow Rangers. Image source: Genius Brands.

Mattel (MAT 0.67%) is producing the toys under its popular Fisher-Price brand. Genius Brands is also partnering with a range of manufacturers to make other Rainbow Rangers themed items, such as books and apparel. It intends to support the launch with a national marketing campaign.

"The Rainbow Rangers brand has all of the elements to potentially become a breakout hit and a huge business for Genius Brands," CEO Andy Heyward said in a press release. "A lot of our licensing/manufacturing partners feel the same way, which is why we have hundreds of product [stock keeping units] in virtually every category coming to retail across North America over the next 12 months."

Now what

As a small-cap company, Genius Brands is prone to violent price swings. Over the past year, the stock has traded as low as $0.052 on March 12 to as high as $11.73 on June 4. And even after today's gains, shares are down 85% from those highs. 

Investors should expect Genius Brands' stock to remain highly volatile in the days and weeks ahead.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Genius Brands International Stock Quote
Genius Brands International
GNUS
$0.75 (0.54%) $0.00
Amazon Stock Quote
Amazon
AMZN
$92.44 (-1.61%) $-1.51
Walmart Inc. Stock Quote
Walmart Inc.
WMT
$153.59 (0.05%) $0.08
Mattel Stock Quote
Mattel
MAT
$18.00 (0.67%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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