Genius Brands International Inc (GNUS)

[rickn23]

Most of the time I would agree with you. But, GNUS just sold the $13.75 million convertible debt for $7 million in cash plus a $4 million promissory note in March. They have only had it for less than 3 months.

I would not pay the $13.75 million in cash and let the debtholders convert the warrants and sell the stock (worth $120 million @ $2/share), until I had to pay it back. I'd keep it ready to use, if needed.

If Kartoon Channel and/or merchandising sales are highly successful, GNUS can pay the debt off before the end of the year. Clean slate for next year.

IF they are not successful, GNUS has cash to stay in business. They would not have to borrow more money at terrible terms.

Edit
I'm not sure how many entertainment companies actually become profitable. Times are tough, right now. Some companies may go out of business. Andy should keep his eyes open for acquisitions that can add to the bottom line, while the company has the cash and the stock has a high valuation.