Genius Group Limited’s (NYSE: GNS) long-anticipated spinoff is finally on the horizon. For months now the company has been promising spinoff dividends as a method of combating naked short selling. Now, the company set the record date for the share dividend on August 31st which could see its stock in anticipation. With this in mind, the stock is highly shorted at the moment, and considering the growing interest in the spinoff, a short squeeze may occur in the lead-up to the record date. In light of this, it could be profitable to go long on GNS stock at current levels.
GNS Stock News
GNS is now approaching the completion of its spin-off of Entrepreneur Resorts Limited (LRT). With shareholders’ approval, the spin-off is expected to be completed by Q3 after court approval in Singapore and completing the NYSE process.
GNS stock has historically seen high naked short selling activity. The company tried to fight this phenomenon back in January by creating an Illegal Trading Task Force to actively pursue all possible actions against people and companies engaging in market manipulation.
By spinning off ERL, GNS can combat naked short sellers that are targeting its stocks since the company is expected to issue a share dividend that would require a full share count – making it easier to identify naked short sellers. In this way, naked short sellers may be under pressure as they would be forced to cover their naked short positions – leading GNS stock to soar.
Moreover, the share dividend may attract new investors to GNS stock once the company announces more details regarding the dividend date. With that in mind, share dividends can become extremely popular which might provide GNS stock with substantial hype.
Meanwhile, GNS postponed the release of its 2022 annual report which was supposed to be on May 15 and will announce the new date once the audit process is completed by its auditors. According to its 2022 guidance GNS expects revenues of $35 million – $38 million and the number of students to be between 4.4 million – 4.6 million.
*Updated August 10th, 2023
The Singapore High Court recently approved GNS’s spinoff of ERL with capital worth $38.3 million in the form of ERL shares. In response to its approval, the company established a record date of August 31 which is why the stock is currently poised to surge over the course of this month.
The spinoff will likely positively affect the GNS stock price over the coming weeks as this move shows the company’s dedication to combatting naked short selling. At the same time, many investors may be interested in receiving the share dividend as it could be an easy way to make a profit by selling the shares they would receive. For these reasons, the stock could see strong buying activity ahead of the record date as investors may want to secure ERL shares.
In this way, GNS stock may run causing a short squeeze since naked short sellers may be forced to cover their positions to mitigate their losses. That said, even without naked short sellers covering, the stock could also witness a short squeeze since it is already highly shorted. In the meantime, the stock has a short interest of 21% and 42.9% of its float on loan.
GNS Stock Financials
In its Q3 2022 report, GNS’ assets increased 480% YoY from $17 million to $83 million, and its cash and cash equivalents increased almost 525% YoY from $1.7 million to $8.9 million. GNS’ total liabilities increased almost 312% YoY from $9.6 million to $30 million.
Revenue also increased 60% from $8 million to $14 million. Operating losses increased nearly 60% YoY from $2.3 million to $5.7 million, and its administrative expenses increased by over 100% from $5 million to $10 million, which amounted to a net loss of $6 million – a 260% increase YoY.
Media Sentiment
@ACInvestorBlog is bullish on GNS’s spinoff.
@stockplaymaker1 is keeping an eye on GNS’s volume.
Technical Analysis
GNS stock recently exited a bearish trend and is now trading in a sideways channel between $0.66, and $0.84. Looking at the indicators, the stock is currently trading above the 200, 50, and 21 MAs which is a bullish indication. Meanwhile, the RSI is approaching overbought at 67 and the MACD curling bearishly.
As for the fundamentals, GNS stock may be poised to run this month as we approach the record date for the company’s planned share dividend on August 31st. Given that the stock is highly shorted, a short squeeze may occur if there is strong buying activity on the stock. With the stock recently exiting its downward channel, investors could wait for the stock to test the upper trendline to confirm breaking the channel before going long ahead of the record date.
GNS Stock Forecast
As things stand, GNS stock could be poised for a major run over the coming weeks due to its spinoff dividends which have a record date of August 31. These dividends could attract new investors to the stock, increase its investors’ long positions, and combat naked short selling by forcing them to cover their position. In this way, a short squeeze may occur since the stock is already heavily shorted. Based on this, it may be a profitable decision to go long on GNS stock ahead of the record date.
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