Genius Brands International Inc (GNUS)

[rickn23]

Why Genius Brands Stock Plunged 25% Today
Investors were apparently disappointed by the media company's big announcement.

What happened

Shares of Genius Brands International (NASDAQ:GNUS) shed a quarter of their value on Monday after the children's entertainment company said it will launch a major new business.


So what

On July 2, Genius Brands' stock soared after it promised to unveil an "exciting business development" on July 6. Well, today is July 6, and investors apparently weren't so excited about what they heard.

https://www.fool.com/investing/2020/07/06/why-genius-brands-stock-plunged-25-today.aspx

Now what

There's little doubt that this portfolio of Lee's creations has substantial value. He helped to create many popular superhero characters, including Spider-Man, Iron Man, Captain America, and The Avengers. Many of his newer creations will also likely prove popular with children.

The question is: How much is this character portfolio worth?

There's no possible way Genius Brands -- with its roughly $55 million in cash reserves -- could have outbid companies like Disney -- which recently raised more than $10 billion via debt offerings -- unless they didn't believe these assets were worth what Genius Brands was willing to pay for them.

So Heyward's grandiose statements regarding the JV -- such as "There simply is no greater treasure chest of intellectual property anywhere" -- seem a little far-fetched, to say the least.

And judging by the stock's plunge today, investors are not nearly as excited about this property as Heyward is.