Shares of Genius Brands International (NASDAQ:GNUS) have witnessed modest surge of 11% in the first half of the year. The move is surprising as the firm has been on a roll. The company has made a robust head of steam with streaming channel, Kartoonand also announced a number of deals. Genius had an amazing quarter one and holds decent cash balance that would be utilised for more multimedia content.
Despite risks, the company is worth investment. Its release Superhero Kindergarten, starring Arnold Schwarzenegger, witnessed over 30 million views while its earnings had a robust 221% increase in sales on a year-over-year basis.
This can be attributed to acquisition of ChizComm Beacon Media, which was completed in February. The company’s home and television entertainment revenues surged by 60% over previous year, offsetting 19% drop in royalties and licensing. The victories though have had little effect on its stock though the merger and acquisition activity results should prove fruitful.
The company’s cash balance surged by 40% from December to March to reach $143 million. The major contribution to the cash is $98.6 million sale of common stock last year. With no financial debt, the firm is going ahead with its M&A strategy with all its internal reserves.
Recruitment of Bedi Singh, ex-CFO of Sony Pictures, suggests that the company is envisaging taking on most of the competition.
However, risks like dependency on popularity of its content with viewers can lead to renewal disagreements with distributors and a loss of market share.