Key Partnership Makes Genius Brands a Smart Bet on Streaming Entertainment

Kid-friendly entertainment provider Genius Brands (NASDAQ:GNUS) is making some serious moves to become a power player in the streaming content space. Yet, perhaps because of its low penny stock share price, some folks might think of GNUS stock as child’s play.

a kid laying on a floor playing with a tablet instead of toy cars that sit next to him
Source: patat / Shutterstock.com

Indeed, not long ago people put this name in the “meme stock” category. By that, I mean that some Reddit and Robinhood traders were trading GNUS stock as a short-squeeze target without paying much attention to the actual intrinsic value of the company.

Thankfully, though, the market appears to be moving past the meme phase when it comes to GNUS. The price action of this pick is steadier now. So, moving forward, investors might not have to take a wild rollercoaster ride.

Besides, a potentially game-changing partnership with another streaming up-and-comer should enhance Genius Brands’ shareholder value considerably.

A Closer Look at GNUS Stock

For safety-minded investors, GNUS stock was probably too hot to handle in early 2021.

That was a time when the media was buzzing about the meme-stock phenomenon. Through no fault of the company, it appears that Genius Brands may have gotten caught up in the frenzy.

In January, GNUS stock popped from $1.36 to around $3, only to fall back to the $1.80 level. Then, something similar happened in March and April. The stock catapulted to nearly $3 again, only to retreat back to the $1.50 level.

As we move into May, though, the price movement appears to be relatively calm. This is a good sign for long-term investors who don’t want to get tossed around by the whims of get-rich-quick traders.

Joining Forces

Genius Brands already has a robust lineup of family-friendly streaming content, such as on Kartoon Channel!, one of the company’s more popular platforms. However, joining up with another content provider would be a smart move for the streamer, adding to Genius’ content offerings and enhancing the bottom line.

Well, now Genius Brands is doing exactly that, embarking upon a joint venture with Cinedigm (NASDAQ:CIDM). What’s more, I’m already quite bullish on Cinedigm as an investment, as I’ve already expressed in a recent article.

Cinedigm develops streaming entertainment channels, such as The Bob Ross Channel and CONtv. As the company puts it, CIDM “powers custom content solutions to the world’s largest retail, media and technology companies.”

This tie-up between the two companies is a major development in the family-friendly streaming space. With this, I could even envision Genius Brands posing as an up-and-coming threat to Disney (NYSE:DIS) in the near future.

The ‘Midas Touch’

Now, maybe it sounds like I’m exaggerating with this Disney claim. Yet, when we take note of what Cinedigm brings to the table, this ought to quell any skepticism.

According to the press release, “As part of the content deal, Cinedigm will provide some of the most popular films and series from around the globe” to the channel. I’d say that’s no exaggeration at all. With this joint venture, the Kartoon Channel! will feature films like CinderellaHero Quest and Bunyan & Babe as well as “holiday favorites” like The Nutcracker and five seasons of the anime series Yu-Gi-Oh! Duel Monsters.

In the release, Genius Brands CEO Andy Heyward took the opportunity to mention that Cinedigm CEO Chris McGurk was once the president of Walt Disney Studios. Heyward also praised McGurk as a “tremendously accomplished executive and an excellent leader who brings with him his Midas Touch everywhere he goes.”

All in all, this deal looks like it could do wonders for GNUS stock.

The Bottom Line on GNUS Stock

Even beyond the Disney comparison, this Genius Brands-Cinedigm tie-up is creating a streaming-content powerhouse. In my opinion, there’s no denying that.

So, now that GNUS stock seems to be moving into a steadier phase, investors can accumulate the shares with confidence.

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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


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