Genius Brands International, Inc. Class Action Lawsuit
- Company Name
- Genius Brands International, Inc.
- Stock Symbol
- Class Period
- March 17, 2020 to July 5, 2020
- Central District of California
The Genius Brands International, Inc. class action lawsuit charges Genius Brands and its founder and Chief Executive Officer with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Genius Brands securities between March 17, 2020 and July 5, 2020, inclusive (the “Class Period”). The Genius Brands class action lawsuit was commenced on August 18, 2020 in the Central District of California and is captioned Verdin v. Genius Brands International, Inc., No. 20-cv-07457.
Genius Brands is a multimedia company that licenses entertainment content for children.
The Genius Brands class action lawsuit alleges that during the Class Period defendants made false and/or misleading statements regarding: (i) Nickelodeon’s purported broadcast expansion of Genius Brands’ Rainbow Rangers cartoon; (ii) subscription fees for the Kartoon Channel!; and (iii) Genius Brands’ growth potential and overall prospects as a company. In addition, while the price of Genius Brands stock was artificially inflated due to these misstatements, Genius Brands registered for sale tens of millions of shares, allowing certain long-time investors to cash out at the expense of plaintiff and the putative class.
On June 5, 2020, Hindenburg Research published a report entitled “A Bagholder’s Guide to Why We Think Genius Brands Will Be a $1.50 Stock Within a Month.” This report questioned the valuation of Genius Brands and highlighted inaccurate public statements made by Genius Brands. With respect to Rainbow Rangers, the report showed that Rainbow Rangers was actually airing nine times per week, rather than the 26-airings figure noted in a Genius Brands press release. On this news, the price of Genius Brands securities fell more than 13%.
Then, on June 16, 2020, Genius Brands announced the programming lineup for its app. As alleged in the Genius Brands class action lawsuit, when Genius Brands announced the slate of content, investors began to realize that the Kartoon Channel! was not going to be the new “Netflix for Kids,” as Genius Brands had indicated. On this news, the price of Genius Brands securities fell more than 14%.
Finally, on July 6, 2020, Genius Brands issued another press release announcing the creation of a joint venture with POW! Entertainment regarding the intellectual property that Stan Lee created after his time at Marvel Entertainment. Genius Brands founder and CEO, defendant Andy Heyward, stated that “[t]he potential value in this single asset is greater than any IP anywhere in Hollywood.” As alleged in the Genius Brands class action lawsuit, defendant Heyward’s statements further revealed that there was little substance behind Genius Brands’ hype. On this news, the price of Genius Brands securities fell more than 25%.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.