$GNS Spin Off May Get The Ball Rolling

AMEX:GNS   Genius Group Limited
After its board approved the spin-off of Entrepreneur Resorts Limited back in January Genius Group Limited (NYSE American: GNS) has now also gained its shareholders’ approval for the spin-off. The spin-off is expected to be completed by Q3 and will likely help expose the naked short sellers that have been targeting GNS for a while, which may lead to a short squeeze occurring as the short sellers would be forced to cover their positions.

GNS Fundamentals

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 that 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.

GNS 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.

Technical Analysis

GNS stock’s trend is neutral with the stock trading in a sideways channel between $0.84 and $1.25. Looking at the indicators the stock is trading under the 21, 50, and 200 MAs which are bearish indications. Meanwhile, the MACD is neutral and the RSI is approaching oversold at 34.

As for the fundamentals, GNS stock has two catalysts approaching with its 2022 annual report expected to be released soon and the spin-off of Entrepreneur Resorts Limited to be completed in Q3 2023. With the possibility of a short squeeze occurring, the current PPS could be a good entry point as the stock is trading near support.

GNS Forecast

The spin-off of Entrepreneur Resorts Limited, may help GNS in its fight against naked short sellers as GNS would be required to do a full share count. GNS has two important catalysts approaching as the spin-off is expected to be completed in Q3 and its 2022 annual report is to be released soon. GNS is prone to a short squeeze due to the high naked short selling activity the stock is witnessing. That coupled with GNS exceptional YoY growth, and GNS stock trading near support makes it a stock worth watching.


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