Grom Social (NASDAQ: GROM) Way Oversold at Less than Half Book Value and the Chart Set Up Looks Irresistible

Grom Social (NASDAQ: GROM) Way Oversold at Less than Half Book Value and the Chart Set Up Looks Irresistible
Good day everyone and welcome to all our new members,

Grom Social Enterprises, Inc. (NASDAQ: GROM) the social media company just for kids, and a creator of media content for animated films and televisions series.

Current price $.323/share (at market close 9-23-22)

If you’ve been watching GROM (I’ve been watching them all year) you know that their shares are at a low right now. In fact, the company’s market cap has dropped to $6.8M, an unprecedented opportunity because GROM has a book value (mrq) of $20.4M.

Let’s look at some recent highs in GROM share prices:

September 16th                $.45/share
August 18th                       $.70/share
June 28th                           $.71/share

A swing to the $.45 level from ten days ago (and I believe it may bounce more) represents a 39% gain. Look at the chart below and you can see that GROM bounces at a consistent pace and the next swing may be due now.

In an interview given by CEO Darren Marks last month, he confirmed that the big revenues to come from GROM will develop in the Curiosity Ink Media (CIM) segment. I want to mention a couple things said in that interview:

“With the acquisition of Curiosity Ink Media last year, combined with bringing on two highly regarded Nickelodeon veterans, Russell Hick and Paul Ward, we quickly upconverted the company from a kids social media provider, animation production studio and educational services, into an emerging player in kids and family entertainment with two feet squarely in Hollywood”.

“As new subscribers are a top priority for most subscription video on demand (SVOD) providers (like Netflix, Amazon, Hulu, etc.), many are waking up to the opportunity that original content for preschoolers and animation represents”.

“We firmly believe the current valuation of Grom is a poor reflection of our revenue potential, asset portfolio and market opportunities. Our position is straight-forward: We have a smart strategy, a deep bench of talented leaders and a roster of potentially lucrative intellectual properties in development.”

The IP portfolio being developed at Curiosity Ink Media is where the value is hidden at GROM. If you visit the company presentation available on the company website, you can get a look at the almost one dozen IP franchises currently in various stages of development and marketing. Thunderous, Baldwins Big Adventures, and The Forgettable Supervillains look like marketable franchises to me.

Top notch talent has been assembled to create it, develop it, and to monetize it. Go to the company website, and review the team that’s been assembled. GROM has brough onboard pros from the world of children’s media with proven histories of success in developing successful franchises like Scooby Doo, Dora the Explorer, and Sponge Bob Square Pants. Many team members have a history at Nickelodeon in their resumes.

As soon as one of the CIM multimedia franchises gets picked up by a Hollywood studio or a subscription video on demand service, revenues at GROM could start arriving in truckloads and the current market value will be history. The team at CIM has the creative and marketing talent to make it happen but most importantly, they have the connections to make it happen.

New developments at GROM:

TV writer, McPaul Smith (Backyardigans, The New Mickey Mouse Club), has been tapped to develop Curiosity’s new animated preschool series, Baldwin.

The first title of the new book franchise, The Adventures of Herbert Henry, called Santa’s Secret Society is hitting bookshelves everywhere on October 25.

Baldwin, their newest IP franchise, will debut in book form when Baldwin’s Big Adventure, is available wherever books are sold beginning October 18.

GROM statistics (mrq)

Outstanding shares        21.3M
Shares in float                  18M
Insider ownership           14.5%
Institute ownership        7.7%
Book value                       $1.13/share
Cash                                  $4.1M
Revenue (ttm)                 $5.4M

GROM shares have fallen below their 20, 50, and 200 SMA levels which I believe has set them up for a double digit (potentially triple digit) swing. The regular intervals of the chart peaks are telling me the next bounce is due near term.

Stay tuned for a full report on GROM.

The Traders News Group

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