Friday, February 26, 2016

GoPro Inc. Another Hopeless Case?


The action camera maker needs to up its game if it wants to ever reach its IPO share price ever again.


It has been a while since the shareholders of GoPro Inc. have been on the sidelines just observing their investing just fall. In a year’s time the stock of the action camera maker has dropped by as much as 73% which has caused much annoyance amongst the investors. Additionally, ever since the start of the New Year, the stock has plummeted roughly by 33%. The terrible start to the year signifies that the current year is not going to be much different from the one that just ended.
GoPro Inc.’s stock has performance has deteriorated with time; it has fallen down to $12 mark from $65 per share at which it was being traded back in August 2015. It’s all time high share price was reported to be $90 denoting a staggering by 86%. The latest earnings report shared by the action camera maker did more damage to the stock than good as it further provided weak guidance for the upcoming quarters as well, worsening the situation and causing increased frustration amongst the shareholders.
As per the guidance for the upcoming quarters provided by the company, the management is expected the revenue to range somewhere between $160 and $180 million; while the Street consensus came down to $298 million evidently the expectation of the company is below the analyst’s estimation. The possibility of the stock to drop further is high as the launch of its first ever drone, Karma and Hero 5 is still months away.
GoPro plans to make the launch of Karma and Hero 5 grand as it’s hoping for things to turn around after these products hit the market however it still cannot be said whether the launch of these devices could make a significant difference. Coming out of the hot water that the organization has gotten itself into is going to be a tough job; if the products do not turn out to be exciting and innovative, they might just lead to yet another catastrophe.
Hero 4 turned out to be a major failure in the action camera maker industry as it failed to attract consumers due to lack of exciting features and easy to use system, if the novel devices fail to live up to the expectations of the company’s customers, it is safe to say that there won’t be going back to what the company once used to be. However, the camera manufacturer has stated that it is working on learning from its previous mistakes and will try to avoid them as much as they can.
The biggest mistake it made with Hero 4 was that it did not market the product towards the right audience hence making many believe that it is catered towards a niche and high end market because the price tag on the product was quite high as well. Mass marketing the product which is not for everyone can be a problem for GoPro and chances are not many people will be looking to buying the drone as well – because what will normal people do with it?
The chief executive officer, Nick Woodman is hoping that the launch of the new devices will turn days around for the stock and stop the stock decline. Despite the fact that it has been efficacious in creating a brand name which numerous companies have failed to do so in years, it is failing in other aspects of creating brand equity.
It had planned to venture into other possible domains and its first step towards it is launching its first ever drone – additionally, it is also making an entrance in the Virtual Reality (VR) market

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