Why Genius Brands Is So Compelling

Genius Brands International Inc. (NASDAQ: GNUS) shares have gone parabolic over the past week. The company started the month with its stock just above $2.00 a share, but only a month ago shares were closer to $0.30 apiece. This move has been predicated largely on its new network service.

The company is launching its new Kartoon Channel, which will be available to over 100 million U.S. television households and 200 million mobile devices. Management has called this a turning point in the company, and investors seem to agree.

Its chief executive and board chair, Andy Heyward, has called this a “Netflix for kids” except that it’s free. The service has no subscription fee and is fully ad-supported. Heyward goes further and says that this is a pure cartoon play, with another board member calling this an “economic vaccine for COVID-19.”

COVID-19 has pushed more people to stay at home. Netflix and Disney+ have been a godsend for many parents looking to distract their kids who are stuck at home. Kartoon Channel joins this list with a specific audience in mind.

Additionally, Kartoon Channel has acquired a large (almost 4,000 episodes) and carefully curated number of animated programs ranging from “Archie’s Weird Mysteries” to “Minecraft; Journey to the End” to “Gummy Bear and Friends.” One key differentiating aspect is that management says all its shows are safe, fun and without violence, negative stereotypes or objectionable language.

Again, management has called this a “rising sea” as on-demand viewership has been rising across all streaming platforms. Investors seem to agree. Before Thursday’s move, Genius Brands was up 2807% year to date. In the past 52 weeks, the stock was up only 348%.

Genius Brands International stock traded up about 13% to $8.93 on Thursday, in a 52-week range of $0.05 to $11.73.