Investing in penny stocks is not easy. Besides the constant and incessant noise and dire predictions from bears, it seems investors have to read the tea leaves to decide what is really happening. As we preach here at Insider Financial, the key is finding momentum BEFORE it happens. We pride ourselves on finding this momentum for our readers and subscribers and one name that we keep coming back to is GNUS stock.
In the course of our research, we have uncovered some new developments that Mr. Market has missed and why GNUS stock remains so undervalued. While the overall market has mispriced GNUS stock, the smart money has been getting in. How can we tell? First, hedge funds have been buying.
Second, there has been a lot of call buying activity for October.
The open interest on October calls is to purchase 1.7 million shares spread across strike prices of $2.5 to $11 a share. These out of the money options are where investors in the know place their bets. It’s a way of winning the lottery with a cheap investment. This is how investors in the know bet on takeovers. Put up a little money to make a lot.
GNUS Stock Questions
Here are a few questions we want investors to ask themselves when it comes to GNUS Stock.
Why did hedge funds buy over 22 million shares when the price dropped from $11 to under $2?
Why is someone loading up on October call options?
Why did Arnold Schwarzenegger elect to receive warrants to purchase shares of the Company’s common stock as an advance against his profit participation in the new animated children’s series, Stan Lee’s Superhero Kindergarten?
Why is the company putting in place an incentive plan for senior management and employees?
Why is CEO Andy Heyward one of the company’s largest shareholders? Why did he buy 11.6 million shares last quarter?
They are all betting on a higher share price!
GNUS Stock Takeover Likely
We were the first ones to speculate that Netflix or Disney would buy GNUS stock. However, we think you can add Amazon and Alibaba to a list of potential suitors as well. The reason is that Amazon AND Alibaba are already working with Genius Brands on Stan Lee’s Superhero Kindergarten.
Created by Stan Lee as one of his final projects, Stan Lee’s Superhero Kindergarten, which will premiere in 2021 on Amazon Prime in the U.S., is co-produced by Genius Brands with China’s Alibaba Group, Lee’s POW! Entertainment, and Schwarzenegger’s Oak Productions. Schwarzenegger, who also serves as executive producer, lends his voice as the lead character in the series.
CEO Andy Heyward is focused on building his entertainment powerhouse. After selling his last company to Disney, when will he sell Genius Brands? Which company is the most likely buyer? Netflix or Disney or Amazon or Alibaba?
Consider the shows in development and the depth of characters in the GNUS stock portfolio. Disney bought Marvel for $4.2 billion. CEO Andy Heyward is following the Marvel playbook.
Right now we know many GNUS stockholders are frustrated and some are even getting discouraged. But it’s important to block out the news and ignore the bears. Instead, focus on what the smart money is doing like Anson Funds, Heights Capital, Arnold Schwarzenegger, and Andy Heyward. They are all looking for a big payday. Going by the increase in October call buying, it might come sooner rather than later in GNUS stock.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in NASDAQ:GNUS or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.