What happened

Shares of Genius Brands International (NASDAQ:GNUS) fell 35.1% in July 2020, according to data from S&P Global Market Intelligence. The family-friendly producer of animated programming started the month on a high note but ran out of rocket fuel in a hurry.

So what

Genius Brands rose as much as 71% on July 2 -- yes, all of that in a single day -- based on the announcement of an upcoming conference call to discuss "a key business development." Expectations ran high as investors speculated about potential partnerships with various giants of the media industry.

The actual news, four days later, turned out to be a licensing deal with Stan Lee's POW! Entertainment -- a much smaller entity than the billion-dollar brands that had been the subject of earlier speculation. Genius's stock fell 36% in two days and continued to slide throughout the month of July.

A bear in front of a red line chart trending downward.

Image source: Getty Images.

Now what

This stock has become the plaything of Robinhood investors. Share prices have bounced between a 52-week low of $0.05 per share in March and a multi-year peak of $11.73 per share in early June. Genius Brands has no revenue to speak of despite a decade-long operating history.

Genius Brands sounds like a solid business on paper, but the company is actually a cash-burning bundle of content licenses without much commercial value. It is more of a lottery ticket than an investment right now, and I would not recommend buying shares of Genius Brands until its insane volatility has calmed down a bit.

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.