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Why Genius Brands Stock Was Up Big Today

By Keith Noonan - Jul 20, 2021 at 3:17PM

Key Points

  • The market rallied today, prompting impressive gains for many meme stocks.

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Despite volatile trading, the children's streaming stock is now up roughly 20% year to date.

What happened

Shares of Genius Brands (GNUS 1.18%) jumped 9.2% in today's trading session, according to data from S&P Global Market Intelligence. The children's entertainment stock gained ground amid momentum for the broader market. 

GNUS Chart

GNUS data by YCharts

There doesn't appear to have been any business-specific news powering Genius Brands' rally. The market rebounded after steep sell-offs a day earlier, and many heavily shorted meme stocks made especially strong gains thanks to the momentum. 

A child looking at a tablet.

Image source: Getty Images.

So what

Concerns about inflation and surging case numbers for the COVID-19 delta variant have pressured stocks recently, but investor confidence ticked up in today's trading. The S&P 500 and Russell 2000 indexes closed the session up roughly 1.7% and 3.6%, respectively, and Genius Brands stock bounced in conjunction with the move. GameStop, Naked Brand, Express, and Newegg were among other popular meme names to make big gains on the day. 

Now what

Genius Brands is a small-cap company with a market capitalization of roughly $500 million and a speculative business outlook. The company has been posting steep losses, and sales performance thus far has been mostly unimpressive. Its Kartoon Channel! streaming platform relies on an ad-based model, and the business has put up just $3.2 million in sales over the trailing-12-month period.

Creating content is resource intensive, but Genius Brands does have roughly $143.6 million in cash, and it's looking at potential acquisition opportunities to help grow the business. The company's focus on the children's entertainment niche could eventually have a big payoff, but there's not a lot of visibility on how the business will perform going forward, and the stock continues to look like a risky investment. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Genius Brands International, Inc. Stock Quote
Genius Brands International, Inc.
$0.95 (1.18%) $0.01
GameStop Corp. Stock Quote
GameStop Corp.
$40.74 (3.27%) $1.29
Express, Inc. Stock Quote
Express, Inc.
$2.18 (3.81%) $0.08
Naked Brand Group Limited Stock Quote
Naked Brand Group Limited
Newegg Commerce, Inc. Stock Quote
Newegg Commerce, Inc.
$3.89 (1.57%) $0.06

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

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