GoPro has been an extremely successful stock since its IPO in June 2014. GoPro has been the best U.S.-listed performing IPO so far this year, with a $24 IPO price. However that all changed Thursday October 2nd, when the stock took a nose dive. The stock fell as much as 14%. The reason for this massive plummet was due to the company's founder and Chief Executive Nicholas Woodman. Woodman and his wife, Jill Woodman, gave 5.8 million Class A shares valuing around $500 milion to charity. It was a great gesture from the Chief Executive, that only caused GoPro a two day hick up and gave some investors a minor heart attack from fear. The stock has been slowly increasing back to its normal price today.
The charity that received this large donation was the Silicon Valley Community Foundation. This is a well known charity foundation, which receive tons of donations, including one from Mark Zuckerberg who famously announced a $1 billion gift a few years back. The foundation has a few options of what to do with the gift, either sell them and cash out or to keep the stocks and hope the company's value sky rockets as it has done in the past. Mari Ellen Loijens, the chief business, development and brand officer for the Silicon Valley Community Foundation, expressed no conclusion to the question. I believe the best call would be to hold on to the stocks and wait for GoPro to get out of the recent slump and sell them once they are back to a reasonable level, which it is bound to do.
Source: http://online.wsj.com/articles/gopro-ceos-foundation-doesnt-intend-to-sell-shares-1412281879
Gopro seems to have a monopoly market in the fact that these underwater high resolution pictures are unmatchable for such an affordable price and how small they are. There are other products out their to compete with Gopro but none come close to the amount of sales and sponsorship that Gopro uses. The stalk will go back to its normal price and even grow due to the new hero 4 that just came out this week.
ReplyDeleteI believe that the stock price of GoPro will rebound in a short amount of time. Since its IPO, GoPro stock has gone from $24 to around $90 in a few short months. Also, GoPro will be releasing two to three new products that should also see increases to the stock price. The fact that the CEO donated to charity may have alarmed stockholders, but should not be received negatively. Until Google or Apple comes out with new technology, GoPro will be continue to be successful for the time being.
ReplyDeleteGiven GoPro's history, I believe their stock price will surface to once familiar measures. I agree with the previous two comments in terms of GoPro's competition and future products. With all the the hype of the Hero 4, it is finally for sale as of this week therefore we will see this reflect in their stocks. With minimum research, there is no question whether GoPro is going to continually introduce newly advanced products that the public loves. With GoPro's stocks positively trending, I believe stockholders should sell once the stock price levels out.
ReplyDeleteI believe GoPro's stock will improve soon. They are in a market by themselves and with new products coming out soon, sales will increase along with the stock. The donation the CEO made to charity shows his confidence in the new products coming out, he feels comfortable to give back, even though the stock is down knowing the new products will bring them back.
ReplyDeleteWhile I do agree GoPro's stock will bounce back somewhat, it seems it is no longer the only company in the market. Polaroid recently released a waterproof, shockproof, mountable camera very similar to the GoPro, for half the price. It will be interesting to see if Polaroid competes with GoPro or if they will be forced out of the market.
ReplyDeleteI also think GoPro’s stock will bounce back in very short time. Even though they may have some competition in the market now, I believe that the name brand will carry them. This is a case where having the popular name brand will allow them to continue to be profitable in the industry.
ReplyDeleteIn response to Neil I feel that it would be very hard for GoPro to be forced out of this market, because I think they have created somewhat of a monopoly power. They seem to have been the only company in this market for quite some time and they have become a household name. If anything we could potentially see a price decrease in the expensive cameras if people start viewing Polaroid's product as a comparable alternative. Also commenting on the article I found it interesting that the company donated stock instead of money I think this is actually a good idea because GoPro has been a fairly steady stock recently. I like the fact that the foundation can decide when to cash out and use the money instead of having a large donation that they may be forced to sit on for a while.
ReplyDeleteIt's rare that you hear about CEO's of companies being so charitable. Although this was a shock to the investors and caused some immediate fears, this will most likely pay off for GoPro in the long run because it's really good "PR" and more investors will have faith in the legitimacy of the CEO. Also, I would have to disagree with selling the stock after it recovers because the drop in the stock was not because of a major problem in the company or product. GoPro is still an amazing company with an amazing product line and will most likely rebound and improve in the future.
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