Published: Thu, January 11, 2018
Medical | By Josefina Yates

GoPro is putting itself up for sale

GoPro is putting itself up for sale

The company announced significant layoffs a few days ago: the layoffs will bring the workforce down to under 1000 and CEO Nicholas Woodman will take a paycut to $1 as the company struggles to get back on its financial feet. GoPro shares are also down by 75 percent from their $24-a-share price when the company went public in June 2014.

It did say, however, the restructuring plans announced today will result in a $23 million-$33 million (€19 milion-€28 million) hit to first-quarter results.

GoPro has had a hard couple of years, as it faced intense competition and poor performance in the drone market.

Additionally, GoPro said it is pulling the plug on its Karma drone business after more than a year of false starts, product stumbles and disappointing sales. 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.

The disappointing outlook sent shares plummeting almost a third to an all-time low of $5.04 in morning trading Monday.

Apparently GoPro has hired J.P. Morgan Chase to explore a potential sale of the company.

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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. GoPro said it expects sales for the quarter ending December 31 to be $340 million, a 37 percent decline from the same period a year ago.

In addition to its earning news, GoPro CEO Nick Woodman told CNBC the company would consider a sale or partnership with another company. 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.

GoPro (NASDAQ:GPRO)'s stock had its "neutral" rating restated by equities research analysts at Wedbush in a research report issued to clients and investors on Tuesday.

Even though GoPro is exiting the drone business, drone makers such as DJI might be interested in the company purely for its cameras, which could be packaged with their drones.

In an announcement to the market, the company said it has lowered the price of its premium model, HERO6 Black, from $US499 to $US399 "to align with its good, better, best product strategy".

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