"Aerial Market Untenable": No More GoPro Drones

"Aerial Market Untenable": No More GoPro Drones

J.P. Morgan helped underwrite GoPro's initial public offering in 2014.

Earlier in the day, the company lowered its fourth-quarter revenue forecast, following weak demand for its cameras in the holiday season, and announced a plan to exit the drone business.

Furthermore, it forecasts that tough regulatory hurdles in Europe and the United States will likely reduce the market for drones in the years ahead.

GoPro is now also facing financial trouble, with the company laying off staff and reducing the salary of CEO Nicholas Woodman, to $1.

The company, which had 1,254 emplyees as of September 30, is reducing that number to fewer than 1,000. GoPro Inc would be willing to partner with a larger sector player but is not actively engaged in a sale, the action camera-maker said yesterday, as its shares partly rebounded from earlier heavy losses. That followed multiple reports of technical issues, which caused the drones to drop from the sky as they were flying.

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"Drones are a competitive space", Pachter said.

GoPro said it will sell through its remaining Karma inventory and will continue to provide service and support to Karma customers. So, for now, I think investors would do well to focus first on GoPro's underlying business rather than on the prospect of any potential acquisition premium.

GoPro today released preliminary fourth quarter 2017 results which paints the company in struggling situation. Wall Street analysts had earlier forecast GoPro to report sales of $472 million for the quarter. The company had previously announced a layoff of about 200 employees in November of 2016.

The Nasdaq-listed tech firm, which is known for durable miniature cameras suitable for filming outdoor activities, reported a drop in sales yesterday and said it planned to cut its workforce. GoPro said it expects sales for the quarter that ended December 31 to be $340 million, a 37 percent decline from the same period a year ago.

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