NEW YORK–(BUSINESS WIRE)–#GNUS–Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of investors that purchased Genius Brands International, Inc. (NASDAQ: GNUS) securities between March 17, 2020 and July 5, 2020 (the “Class Period”). Investors have until October 19, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Genius conducted a nonstop campaign of hype and press releases to boost the share price of Genius shares. These releases touted the intellectual properties connected to Genius and, among other things, hyped the launch of its new free educational multimedia platform, the “Kartoon Channel!” app. These releases had their intended effect, as the price of Genius shares skyrocketed.
But the Genius story was not all that it seemed. On June 5, 2020, Hindenburg Research published a report titled “A Bagholder’s Guide to Why We Think Genius Brands Will Be a $1.50 Stock Within a Month” (the “Hindenburg Research Report”). This report questioned the valuation of Genius and highlighted inaccurate public statements made by Genius.
On July 2, 2020, Genius issued a press release touting that a “Key Business Development” would be announced on July 6, 2020. This vague announcement significantly boosted the stock price, as the price jumped from $2.31 on July 1, 2020 to $3.55 on July 2, 2020.
The July 6th announcement, however, was another exaggerated press release whereby Genius announced the creation of a joint venture with POW! Entertainment regarding the intellectual property that Stan Lee created after his time at Marvel Entertainment. Defendant Heyward stated that “[t]he potential value in this single asset, is greater than any IP anywhere in Hollywood.”
With these exaggerated statements, investors realized that there was little substance behind the hype. Following the July 6, 2020 press release, the price of Genius stock dropped significantly from a close of $3.55 on the previous trading day to a closing price of $2.66 on July 6, 2020.
The complaint, filed on August 18, 2020, alleges throughout the Class Period defendants made false and/or misleading statements regarding: (i) Nickelodeon’s purported broadcast expansion of Genius’s Rainbow Rangers cartoon; (ii) subscription fees for the Kartoon Channel!; and (iii) the Company’s growth potential and overall prospects as a company. While the share price of Genius stock was artificially inflated due to these misstatements, Genius registered for sale tens of millions of shares, allowing certain longtime investors to cash out at the expense of Plaintiff and the Class.
If you purchased Genius securities during the Class Period and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa Fortunato or Marion Passmore by email at [email protected], telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York and California. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
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