The company said it would reduce its headcount to fewer than 1,000, from 1,254. The camera maker also confirmed the report of job cuts we heard about last week, but there could be even bigger changes in store for GoPro than just another round of restructuring. He says he'd consider selling the company but is still planning to stay independent. Following intense competition and low-profit margins, the company is finding it incredibly hard to make its drone business sustainable.
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.
Shares of GoPro tumbled 21 per cent to $5.94 at 11:30 a.m.in NY and earlier fell as low as $5.04, the most since the IPO. The company was valued at $3 billion after its 2014 IPO, but has continued to struggle with weak revenues. 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.
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. That shaved $80 million from expected fourth quarter revenue, which the company now estimates will total $340 million, falling short of the $472 million expected by analysts.
GoPro founder and CEO Nicholas Woodman will reduce his 2018 cash compensation to $1.
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. 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.
And although GoPro's Karma drone was the number two offering in its price division, the company will exit the "extremely competitive" drone market, it said.
GoPro Inc (NASDAQ:GPRO) shares are plunging 11% after what one analyst already saw as the writing on the wall: a negative preannouncement.
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".