Who Will Buy GoPro? Company Said To Explore Sale

Gopro, Inc. - GPRO - Stock Price Today - Zacks

In the company's fourth quarter 2017 results announcement, it said it will discontinue its Karma drone and exit the category. Instead, the action camera maker confirmed it's ending Karma production and will cut almost 300 jobs, or more than 20% of its global workforce. Over the last ninety days, insiders have sold 704,907 shares of company stock valued at $6,478,800.

GoPro initially put the Karma on sale in October 2016, but pulled it from the market after multiple reports of technical issues that caused the drones to drop from the sky as they were flying.

"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier", said Woodman, adding that the company "is committed to turning our business around in 2018".

Shares of GoPro plunged 23 percent in morning trading Monday on the news. CEO Nicholas Woodman is also reducing his salary to $1 this year. And now the company is preparing itself for the inevitable as GoPro is thinking about selling itself to someone else, but it wants to stay independent. They rose from the lows through the trading session and got an additional lift after CNBC reported the company has hired JPMorgan to help with a possible sale.

The company was already forced to announce a price cut on December 10 for its core camera product, the HERO5, due to weak pre-holiday sales.

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In particular, the company forecast its revenue will fall sharply by 37 per cent to $US340 million, which is far short of Wall Street estimates (of a more lofty $US472 million).

For now, the company seems to be working hard on its action cameras, and we can expect to see some more price cuts on the Hero series.

On Monday, GoPro said it would exit the drone business and cut at least 20 percent of its workforce as the sport-camera maker continues to deal with slumping overall sales.

"Although Karma reached the number two market position in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market", said GoPro in an earnings report. GoPro executed a mass recall, but then came the DJI's Mavic Pro which completely defeated Karma in nearly every aspect, at a lower price point.

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