GNUS Stock: Genius Brands International Inc needs all of Arnold Schwarzenegger's help
|- Genius Brands International Inc's shares are dropping as investors are concerned warrant handouts.
- The signing of Arnold Schwarzenegger seems to terminate the previous rally.
- Critical support awaits at $3.45 and resistance is at $4.52.
Hasta la vista baby – Arnold Schwarzenegger's famous punchline may reflect the end of the rally for Genius Brands International Inc. NASDAQ: GNUS is trading around $3.80, down some 16% while broader stock markets are enjoying a rally.
The entertainment company is launching its Kartoon Channel with Arnie as the co-executive producer of "Superhero Kindergarten" alongside Stan Lee. The famous actor – and also the former governor of California – will contribute his voice as well as join the team.
Genius CEO Andy Heyward told investors that Schwarzenegger will be compensated with warrants – and that is causing worries among investors. The firm has been diluting existing shareholders and increasing its gamble.
GNUS stock price
The stock is situated between the recent peak of $.52 and trough of $3.45 that were seen in recent days. These battle lines are the immediate ones. Tumbling below $3.45 would open the door to a free-fall toward $2 while surging above $4.52 could pave the ground for another attack on $8.
The coronavirus crisis has raised the need to keep kids entertained while they are at home and have more spare time. Launching a cartoon network seems like having significant potential, especially with the specter of a second wave of coronavirus in the US.
However, Genius – and any competitor – need robust execution and to convince shareholders they have a business case.
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