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S&P 500   4,967.23
DOW   37,986.40
QQQ   417.49
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S&P 500   4,967.23
DOW   37,986.40
QQQ   417.49
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Is the 1,600% Rise in Genius Group Stock Justified?

Is the 1,600% Rise in Genius Group Stock Justified?

Key Points

  • Genius Group shares are up 1,600% for 2023.
  • The Company announced $48 million to $53 million in revenues and positive EBITDA for 2023.
  • The Company is waging war on illegal short-sellers of its stock with an Illegal Trading Task Force led by former F.B.I. director Timothy Murphy.
  • The Board approved a spinoff of its Entrepreneur Resorts subsidiary.
  • The Company announced an extraordinary general meeting of shareholders on Feb. 16, 2023.
  • 5 stocks we like better than Genius Group

Global Edtech and education company Genius Group Ltd NYSE: GNS shares have spiked by 1700% for 2023. The stock was trading just a few hundred thousand shares a day leading up to its 269 million shares trading day on Jan. 19, 2023, where it spiked 290% to close at $2.09. Interest has remained relatively strong as shares have doubled since then to $5.71.

The 52-weekly range sits at $0.30 to $36.75. The Company offers entrepreneurship classes claiming itself as “The World’s #1 Entrepreneur Education Group” with over four million students throughout 200 countries.

It competes on a smaller scale than other publicly listed education companies like Chegg Inc. NASDAQ: CHGG, Strategic Education Inc. NASDAQ: STRA, and Stride Inc. NYS: LRN. It has been on an acquisition binge acquiring Entrepreneur Resorts in 2020 for $32 million and plans another $80 million in future acquisitions. It has the potential to be a meme stock.

What Does Genius Group Do?

Genius Group provides live and online classes, both off and on campus, tailored around leadership and entrepreneurship. Its programs start for kids as early as 0 to 7 years old for early learning to the entrepreneur stage for ages 16 to 80.

Its curriculum caters to individuals, businesses, schools, governments, students, and teachers. Genius Group owns many properties and restaurants through Entrepreneur Resorts Limited, which it acquired for $32 million in June 2020. 

Ugly Price History

Singapore-based Genius Group Ltd. IPO’ed on the NYSE American exchange on April 12, 2022. Shares hit a high of $36.75 and a low of $13.03 on the first day of trading on just over one million shares volume. Shares have since fallen to a low of $0.30 before staging a rally.


Waging War on Short Sellers

The Company claims evidence of a significant amount of illegal short selling in its stock. The Company has blamed illegal short selling as part of the reason for the stock getting pummeled.

Its Board announced plans for creating an "Illegal Trading Task Force" on Jan. 19, 2023, to investigate and pursue with regulators the prosecution of persons engaged in market manipulation of its shares. Former deputy director of the F.B.I. Timothy Murphy will lead the investigation.

The press release of the task force caused a massive stock surge on massive volume. This comes after the Jan. 18, 2023, Board meeting, which approved the spinoff of its hospitality-focused subsidiary, Entrepreneur Resorts ltd.

Volume soared to 269 million from 18 million shares the previous day as the stock rallied nearly 400% to close at $2.09. The Company has a 10 million share float and just under 25 million shares outstanding for an $80 million market cap. Various sources show less than 100,000 shares short. However, the illegally short stock wouldn't appear in the short interest data.

Fiscal 2023 Revenue Guidance

On Jan. 23, 2023, the Genius Group raised its fiscal full-year 2023 financial guidance. The Company says it's heavily weighted towards the year's second half.

It expects full-year revenues of $48 million to $52 million, up 37% from $35 million to $38 million 2022 pro forma guidance. It expects students to jump 30% from 5.7 million to 6 million. It expects adjusted EBITDA between $500,000 to $1,000,000.

Genius Group CEO Roger Hamilton commented, “We believe the courses we deliver are counter-cyclical. In challenging economic times, more people seek education to grow their financial literacy, and entrepreneurial and investing skills. In 2023 we are expecting Genius Group to continue our strong growth trajectory, and we are focused on managing our costs and achieving positive EBITDA. We have a strong management team in place, the integration process of our five acquisitions in 2022 is underway, and we are looking forward to a successful 2023.”

Entrepreneur Resorts Spinoff

On Jan. 30, 2023, Genius Group announced the Board’s approval of a spinoff if it’s Entrepreneur Resorts Ltd. Entrepreneur Resorts Ltd operates a Bali resort, South Africa safari, and co-working cafes in Bali and Singapore. The purpose of the spinoff is to enhance shareholder value.

Entrepreneur Resorts is publicly listed on the MERJ Stock Exchange (ERL) with a share price of $2.75, implying a $37 million market capitalization. Genius Group owns 97% of outstanding shares. It’s subject to shareholder approval and possible court order.

Extraordinary Shareholder Meeting Scheduled

The Company announced an extraordinary general meeting on Feb.16, 2023, for shareholders to vote on two proposals. Shareholders must vote on the resolutions for a share repurchase mandate and a share consolidation. A share consolidation proposal is a mean to reduce the number of outstanding shares, usually through a reverse split. Both of these actions may further perpetuate a short squeeze

Is the 1,600% Rise in Genius Group Stock Justified?

Daily Bull Flag Breakout

GNR daily candlestick chart indicates a bull flag breakout. After hitting a high of $6.28 on Jan. 23, it continued to make lower lows setting up the flag. The bull flag triggered the gap breakout through the $3.92 level on Jan. 30, as shares hit a peak of $7.27 before the reversion.

Since it was a higher low candle, it also set up the daily market structure low (MSL) buy trigger on a breakout through $7.27. The weekly 20-period exponential moving average (EMA) support rises to $2.64 followed by the $daily 50-period MA at $1.05. Pullback supports sit at $4.20, $3.10, $2.80 gap, $2.59, and the $2.24 gap

Should you invest $1,000 in Genius Group right now?

Before you consider Genius Group, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Genius Group wasn't on the list.

While Genius Group currently has a "hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Genius Group (GNS)
0 of 5 stars
$0.42+1.9%N/AN/AN/A
Strategic Education (STRA)
4.3123 of 5 stars
$98.11flat2.45%33.83Buy$124.25
Chegg (CHGG)
4.661 of 5 stars
$7.18+1.3%N/A-44.88Reduce$10.00
Stride (LRN)
4.2557 of 5 stars
$56.53-1.3%N/A14.28Moderate Buy$71.75
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Jea Yu

About Jea Yu

  • JeaYu21@gmail.com

Contributing Author

Trading Strategies

Experience

Jea Yu has been a contributing writer for MarketBeat since 2018.

Areas of Expertise

Equities, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development

Education

Bachelor of Arts, University of Maryland, College Park

Past Experience

U.S. equity markets trader, writer and analyst for over 25 years. Published four books by publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. Speaker at various expos and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trade publications, including Stocks & Commodities, Active Trader and Online Investor.


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