Genius Brands (NASDAQ: GNUS) announced today they had cemented a groundbreaking venture. They will be creating the “Stan Lee Universe” and will assume world-wide rights to the characters based on Stan Lees creations. With the GNUS YTD growth currently standing at 1,200%, it appears GNUS is the gift that keeps on giving. Our previous article broke-down GNUS and it’s simple yet effective business model. We will cover the announcement as it is released alongside a breakdown of what this will mean for GNUS investors.

Table of Contents
1. LIVE: GNUS sign the dotted line with Stan Lee productions
2. What to expect in the coming weeks. 
3. Should you take a short or long-term approach?

LIVE UPDATES: Genius announcement

“In all of Hollywood, there is no greater prize. This is the Holy Grail. Stan Lee Universe is a once in a lifetime asset drawn from over 100 original, heretofore unexploited properties, created by the most successful creator of intellectual property of our time.”

“I have no doubt that the greatest characters, the greatest stories, and the greatest hits from the mind of Stan Lee have yet to be told.

“For the Genius Brands’ shareholders, we look forward to effectively and smartly monetizing this asset across all platforms. I have no doubt that we will attract the most talented producers, directors, and marketers in the world as we unlock this one of a kind treasury and bring forth the next wave of Stan Lee creations for the world to experience and enjoy.

Andy Heyward, Chairman & CEO of Genius Brands. Genius announcement View entire press release here 

The genius announcement is an exciting prospect for investors as the Stan Lee name itself offers much monetary value to the table. The magnitude of this deal will become more apparent in the coming months. However, it is safe to say this is a significant development for the Cartoon animator and licensee.

What we can expect to happen over the coming weeks after the Genius announcement?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area. 

Speculators will look to make a nice margin before selling in the late afternoon. Assuming this news has not been over-hyped by Executive management at GNUS, the stock will likely follow its path of exponential growth before settling down at a new equilibrium. It comes down to the duration of time you are willing to hold GNUS. Here’s an important point to remember brought up in a previous article discussing the long term potential of GNUS.

“Considering the dynamic nature of this company (GNUS) and it’s ability to run at almost full capacity during a pandemic –  makes this company something quite special. YIG often talks about how COVID-19 will force the economy to change. And companies like Genius are making serious ground in building the foundations of this new, COVID-19 driven economy.”

However, considering the rollercoaster style activity of GNUS we could see the stock follow a downward spiral. Thus, investors should look at the stock with relative optimism and pessimism as the sentiment of GNUS investors can change in a blink of an eye.

What does this announcement mean for short-term and long-term investors?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area. 

Riding the hype

GNUS’s constant upward surges attract many day and swing traders. However, since the volcanic eruption back in June, the bears have had their way GNUS. Today’s milestone achievement could be the announcement to re-inject the optimism. (opinion not advice) Mainly because GNUS’s brand recognition will likely increase ten-fold, and forecasted revenue estimates should rise. However, investors looking to ride the GNUS wave should not adopt the attitude that “it will keep rising”. Because what GNUS history tells us is that the GNUS roller coaster will reach its apex at some point. Also, expecting a 2000% + rise is unrealistic. (opinion not advice) Because the share price sits around the $3 mark and not the 20 cent mark. Thus, it is best to set a modest exit point to mitigate the risks and increase the chance of walking away with a gain. (opinion not advice)

 

Long term Investing

Considering the risks of investing off the momentum, some investors may wish to opt for a longer-term investment. The Stan Lee deal represents another trophy in GNUS cabinet, another potential monetizing asset, and,  a strong signal of growth. (opinion not advice)  Long-term investors should see each new show/book/merchandise line create higher and higher resistance points over time. Giving support to the argument that GNUS should rise in the short term. However, just like the short-term, the long-term strategy does hold some risk. The rapid expansion will likely devalue the stock soon. Because the traders who drove up the price will migrate to another trending stock. Thus, you might be a long-term investor, but you must think about the rest of the crowd’s mentality. Because a stock price is not the reflection of the company but rather mass psychology In saying that, an entry point could arise from the sell-off of today’s announcement or in the future. (opinion not advice)

Follow this article for updates on the Genius announcement this morning (NASDAQ:GNUS).

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Tyger Fitzpatrick, and Patrick McLoughlin, Founder, and Senior Manager of Youth Investment Group.

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