Genius Brands International (NASDAQ:GNUS) Stock Sees Buying At Lower Level: Is it Sustainable?

Investors in Genius Brands International (NASDAQ:GNUS) haven’t been able to find many reasons to cheer in the current year. Stocks of the children’s entertainment company have plummeted by 50% from the 52-week high and it is anticipated that there will be more pain as the management is burning cash and issuing a higher number of shares. The company has had a history of underperformance despite having an interesting Intellectual Property as its revenue continues to grow at a snail’s pace as compared to its expenses.

The company, which licenses multimedia content for tweens and toddlers through the flagship network, Kartoon Channel, is available on major platforms such as Google Play, Amazon Prime as well as Roku. It draws revenues from advertising, media advisory services as well as other businesses.

Genius second-quarter sales spiked by 318% as compared to the previous year to reach $2.34 million due to an increase in royalties. The company also saw a huge 900% spike in its unique users to reach 21 million on the Kartoon Channel. Yet, the firm is struggling to create value due to its extensive spending as the total operating expenses tripled to $9.9 million with an operating loss of $7.6 million in the period.

Its total outstanding shares as on August 16, 2021, stood at 300 million vis-à-vis 79 million this time last year.