Educational company Genius Group (GNS) has experienced recent turbulence, including internal controversies and legal disputes, which have added to the company’s challenges. The stock is down over 99% in the past three years and is at risk of delisting from the NYSE. The firm posted a revenue increase of 27% to $23.1 million in 2023, reflecting the growing number of students utilizing the platform. The company entered this year with ambitions for strategic acquisitions and business enhancements, including launching Genius City in 10 cities to propel its revenue beyond $105 million by the end of 2024.
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Those ambitions have been unfulfilled thus far, leading to the board’s ousting of the founder and CEO, with possible litigation to follow. Investors may want to steer clear at this time.
Genius Group Being Overwhelmed By Internal Issues
Genius Group is a global provider of entrepreneurial education and business development tools. It operates through two major segments: Education and Campus.
Apart from education, Genius Group also operates entrepreneurial resorts in Bali and South Africa, the Genius Café in Bali, and Genius Central, a co-working hub in Singapore. Moreover, the company provides home childcare, investment education services, and a wide range of on-campus and online programs at various levels.
However, the company is currently dealing with severe internal issues. CEO Roger Hamilton was allegedly ousted without proper notice, which was an invalid move under Singapore law and a source of possible future litigation. A separate investigation into potential corporate governance violations related to an acquisition from LZG International Inc. is also underway. In addition, the company has canceled an Extraordinary General Meeting (EGM) initially scheduled for September 18, halting a proposed 1-for-10 reverse stock split following feedback from stakeholders.
Analysis of Genius Group’s Recent Financials
The company’s most recently disclosed financials were for the Fiscal year 2023, which marked significant growth and progress for the Genius Group. Revenue exhibited a 27% increase, climbing to $23.1 million, up from $18.2 million in 2022. The pro forma 2023 revenue witnessed a remarkable spike of 150%, reaching $70.4 million from the previous year’s $28.1 million, which included revenue generated from the FatBrain AI acquisition. Also, students and users grew 24% to a total of 5.5 million.
Gross profit increased to $11.9 million, accounting for 52% of the revenue, compared to 47% ($8.6 million) in 2022. Furthermore, the net loss after tax dramatically fell by 90% to $5.7 million from $56.0 million in 2022. On a pro forma basis, the net loss after tax was further reduced to $0.8 million.
Genius Group issued 2024 pro forma revenue guidance of a minimum of $105 million for the full year, highlighting a 50% increase compared to 2023’s pro forma revenue of $70.4 million.
GNS Stock in Freefall
Despite reporting positive results for 2023, the stock has declined, shedding over 88% of its value in the past year. It trades at the low end of its 52-week price range of $0.66 – $12.00 and demonstrates ongoing negative price momentum, trading below its 20-day (0.92) and 50-day (1.31) moving averages.
Due to the rapid decline in share price, the company had proposed a reverse stock split to increase the per share market price of shares to meet the minimum share price requirement for continued listing on the NYSE. With the sudden cancellation of the proposed consolidation, it’s unclear how the stock will recover to meet the minimum requirements to avoid suspension and delisting from the NYSE.
Bottom Line on GNS
Despite entering 2024 with strategic initiatives to energize its revenue, Genius Group currently finds itself amid a substantial share decline and the threat of delisting, casting a significant shadow over its future prospects. The recent board drama and the impending litigation only add to the company’s woes, making it less appealing to investors now. Investors are advised to steer clear as the company grapples with significant uncertainties.
