J.P. Morgan helped underwrite GoPro's initial public offering in 2014.
Sport-camera maker GoPro confirmed Monday it will slash at least 20 percent of its workforce and drop its Karma drone business as it restructures operations.
GoPro blamed a hostile regulatory environment in the USA and Europe along with an extremely competitive market for the decision to cut drones.
GoPro is now also facing financial trouble, with the company laying off staff and reducing the salary of CEO Nicholas Woodman, to $1. Shares lost 96 cents, or 12.8 percent, to close Monday at $6.56. The company says it plans to reduce its headcount in 2018 from 1,254 employees to fewer than 1,000. 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.
"Drones are a competitive space", Pachter said. In the months that GoPro was dealing with the, uh, fallout from the Karma's problems, DJI released two new smaller and cheaper drones that essentially made the Karma obsolete. The company said it expects revenue of about $340 million for the fourth quarter after projecting $470 million for the quarter in November. Wall Street analysts had earlier forecast GoPro to report sales of $472 million for the quarter. A buyer could leverage GoPro's brand and gain profit contributions from device sales, analysts said.
"Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier", Chief Executive Nick Woodman said in a statement alongside results.