Genius Brands Could Torpedo Your Portfolio

Genius Brands (NASDAQ: GNUS) stock is down almost 77% from its 52-week high of $11.73, with shares trading at just $2.72 as of Wednesday's close. But while the company's valuation looks more reasonable at these levels, there's still more downside in this struggling children's entertainment company.

Investors should avoid Genius Brands until management can demonstrate a track record of delivering value to shareholders. Right now, investors face equity dilution because of Genius Brands' cash-burning business model, capital raises, and stock-based compensation. A recent production deal with Arnold Schwarzenegger will make the problem worse.

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Source Fool.com