Bad Karma - GoPro Fires Hundreds of Workers and Exits the Drone Business

Bad Karma - GoPro Fires Hundreds of Workers and Exits the Drone Business

In addition to grounding their drones, GoPro also announced that they would be cutting their current 1,254 strong workforce to less than 1,000. Over the last ninety days, insiders have sold 704,907 shares of company stock valued at $6,478,800. Following intense competition and low-profit margins, the company is finding it incredibly hard to make its drone business sustainable.

"GoPro is committed to turning our business around in 2018", the founder and CEO says. After trading resumed, the shares fell further, and the stock was down 30 percent by 10AM. The company was valued at $3 billion after its 2014 IPO, but has continued to struggle with weak revenues.

Various news sources started reporting that the sports camera manufacturer had hired JP Morgan to assist with a sale process. GoPro CEO Nick Woodman told CNBC that the company is considering a sale or partnership with another company, but it plans to stay independent. 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. Since then, its Karma Drone project has been closed down and GoPro was forced to cut the price of its Hero6 Black camera by $100 to spur sales.

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. Apple would certainly have the cash to buy GoPro this year, especially if it repatriates a massive chunk of the cash hoard it has overseas, as most analysts generally expect it to do.

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Woodman, 42, rocketed to the top of the Bloomberg Pay Index, a ranking of the highest-paid United States executives, as GoPro shares soared after its initial public offering, boosting the value of his 2014 equity grant.

On Monday, GoPro said it would exit the drone business and cut at least 20 percent of its workforce as the sport-camera maker continues to deal with slumping overall sales.

Woodman said GoPro's results were impacted by several factors, including a reluctance of consumers in November to purchase the company's Hero5 Black camera at the same price it cost when the camera was launched in late 2016.

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