GoPro Kills the Karma and Exits the Drone Business

GoPro Kills the Karma and Exits the Drone Business

Nick Woodman, the CEO of the action camera manufacturer stated that the company would consider a sale or partnership with another company, but the firm's intention would be to remain independent. Zacks Investment Research raised GoPro from a "hold" rating to a "buy" rating and set a $12.00 target price for the company in a research report on Wednesday, October 4th.

Despite these latest failures, Woodman remains upbeat about GoPro's future.

In addition to grounding their drones, GoPro also announced that they would be cutting their current 1,254 strong workforce to less than 1,000. GoPro shares are also down by 75 percent from their $24-a-share price when the company went public in June 2014.

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GoPro's HERO5 camera line-up significantly underperformed during the holiday quarter, and the company ended up slashing $100 off the price to generate sales. Wittine points out a quote that stands out from his conversations is a supply chain contact looking for a year of more challenges lying ahead for GoPro.

The move comes as GoPro looks to return to profitably from its struggling business, although the company's CEO stated earlier on Monday that the company would be interested in a potential merger or acquisition of the firm. Analysts with GBH Insights estimate that tech firms could repatriate as much as $400 billion in cash this year, so any USA firm with a large pile of cash stashed overseas would be able to buy GoPro.

GoPro released its preliminary fourth quarter 2017 report, which that the company is in tough shape: They are firing hundreds of employees and will also exit the drone market. Wall Street analysts had earlier forecast GoPro to report sales of $472 million for the quarter. After a chat with supply chain contacts on Friday, looking for further "color" on what to expect for the tech player's fourth quarter turnout, the picture is not one that can keep even the former bull's positive sentiment anymore- at least not "with a straight face". He said this morning that short-sellers were slashing their exposure to the company before the holiday season. Those things - and the GoPro name - helped put Karma into second place in its price band in 2017 behind category leader DJI. As a result, the company announced that they would be stopping the manufacturing and sale of the Karma drone.

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