Shares of children's entertainment outfit Genius Brands (GNUS -7.48%) are higher by 3.3% as of 11:58 a.m. ET Wednesday following the announcement of a new chief brand officer. The rally, however, may have been set to take shape with or without that news.
It would be easy to connect the promotion of global franchise management's general manager, Kerry Phelan, to today's surge from the stock. She does, after all, have 30 years' worth of experience in the business, having handled franchises like Lucasfilm's Star Wars and Pixar's Cars. And to be fair, there's no denying her assuming the newly created role as Genius Brand's chief brand officer is helping the stock move higher than it otherwise might.
It's arguable, however, that much of Wednesday's rally was going to unfurl anyway. This meme stock had fallen more than 75% between March's high and Monday's low, when the stock's chart made a pattern that suggested a bottom (and capitulation) had been made. Investors have followed through on that reversal hint in the meantime, and likely would have done so even without news of Phelan's promotion.
It's a tempting scenario for bargain hunters, to be sure. The company handles several familiar kids' shows like Rainbow Rangers, Stan Lee's Superhero Kindergarten, and the soon-to-be-released Shaq's Garage.
The fact is, however, gains of this size have been seen several times since March. None of those advances snapped the bigger-picture downtrend. Indeed, a big piece of Genius Brands' intraday gain has already been given back. The meme stock trading crowd and short-sellers may still be in control, posing a tricky, dangerous scenario for conventional investors who are just looking for a bargain.
Today may well mark the beginning of a more prolonged rally. It's way too soon for most traders to make such a bet, though. Today's announcement of a new chief brand officer isn't nearly enough.