Shares of Marks of genius (GNUS -4.97%) have climbed 23.7% this week from their close last Friday, according to data from S&P Global Market Intelligence.
Investors didn’t care so much that the children’s entertainment company reported earnings that showed a 35% increase in sales (though the stock was up nearly 10% on the news). Rather, it was the announcement that Genius Brands had signed a 20-year contract with disneyit is (SAY -0.70%) Marvel Studios licenses the name and likeness of comic book legend Stan Lee for use in film and television, as well as for use at Disney theme parks worldwide, which has made stocks skyrocket.
The stock had soared as much as 35% at one point in the day, before settling for a 12% gain. Shares of Genius Brands have since fallen.
Genius Brands has always tried to leverage its connection to Stan Lee, saying it would develop shows based on his intellectual portfolio. Although Lee has created some of the most iconic superhero characters, such as Spider-Man, Iron Man, Avengers, and X-Men, these aren’t the ones Genius Brands also has access to.
Instead, the media company would create shows based on characters like Lucky Man, Politenessman, and Alter Ego. Hardly the stuff to get the pulse pumping. This deal, however, has potential for Genius Brands.
With POW! Entertainment, the company Lee started in 2001 to manage the rights to his designs, Genius Brands manages how Lee’s likeness can still be marketed. Lee remains an extremely popular character even after his death, particularly because he often made cameos in films featuring his designs. The “Easter egg hunt” for her face was a fun pastime for many.
Still, digitally inserting Lee into Marvel films now comes with risks, as it may appear to exploit his legacy. Disney received backlash from fans after digitally recreating the late Peter Cushing for use in Star Wars: Rogue One and shoehorn footage of Carrie Fisher taken before her death in The Rise of Skywalker.
The sale of Stan Lee merchandise and consumer products that will be sold at Disney theme parks, on its cruise ships, and various other locations will potentially be more important to Genius Brands.
By elevating Lee again through this deal, the media company has the potential to see the characters and intellectual property it created with POW! gain wider recognition. Politenessman may attract more attention than it otherwise as Genius Brands achieves a 20-year revenue stream from license fees and merchandising royalties.