GoPro: A panorama of woes

Here’s a trivia guys. A GoPro Hero 6 action camera costs $400 and a GoPro share costs $5.37. Which one would be your pick? Neither would be the wisest choice! There are better ways to shell off money.

Shutterbug investors may be inclined towards getting GoPro shares at such a cheap quote, but there is hardly any indication from the company’s side that it is on a healing path. Even the latest attempts at regaining the lost market share by diversifying its portfolio with the introduction of 360-degree cameras and Karma drone have proved to be futile. Both the products arrived late to the market and failed to garner the enthusiasm it expected from customers.

The stock lost 38% of its value in the last one year, losing 28% since the beginning of this year. Meanwhile, camera sales declined almost 9% in 2017 and fewer people opted to upgrade their devices due to lack of meaningful add-ons.

To beat the declining volume, the company has been cutting down on its operating expenses, which has now started biting back.  Gross margin dropped as much as 25% in the fourth quarter of 2017. And yet, the cost-cutting measures don’t guarantee that they would reverse the declining shipments.

GoPro’s latest attempt to salvage the company from the on-going crisis was to find a buyer. It had even approached JPMorgan (JPM) last year to help the company find a prospective buyer. But as it turns out, nobody cares! The company said they could not find even a single serious bidder. Shares were down almost 3% after the news.

The stock lost 38% of its value in the last one year, losing 28% since the beginning of this year.

Even if the company manages to find a buyer, it has a line-up of rivals to beat – including Garmin (GRMN), Xiaomi and Sony. Even Apple (AAPL) with smartphones featuring high-end cameras is a company to look out for. And with the kind of innovation the company has displayed so far, the result of a technological face-off is a no-brainer!