Coverage: GoPro gains 30 percent on debut

If you’ve ever filmed yourself doing something active or outdoors, you likely used a GoPro. The cameras are synonymous with mountain bikes, skateboards and skydivers alike – and now the name is well-known by tech investors.

Sydney Ember and Michael J. de la Merced had this story for The New York Times:

Like extreme athletes and everyday adventurers, investors are keen on GoPro, the camera maker that has become one of the biggest names in action videos.

Shares of the company opened at $28.65, about 19.4 percent above the initial public offering price. The offering priced at $24 a share, at the top of the expected range. The stock price continued to rise after trading, to $33 a share before falling back a bit. It ended the day at $31.34, up nearly 31 percent from the offering price.

GoPro is one of only a handful of technology companies to price an I.P.O. after the spring lull. The start-up, however, is more hardware than high-tech. GoPro’s main offering is its line of rugged and waterproof cameras — adventure racers and base jumpers have taken to the cameras to film their endeavors.

The Associated Press story (via Time) had these details about the camera and what the company sales.

The cameras, which are light and waterproof, cost between $200 and $400. It also sells accessories such as cases, battery packs and mounts that help users attach their cameras to surfboards, helmets or their wrists. And it has a free app and software that lets users edit, store and publish their videos to their social media accounts including Facebook, Instagram, Twitter and YouTube.

GoPro raised $427 million after selling 17.8 million shares at $24 each.

The Reuters story by Tanya Agrawal had this background about the company:

Videos taken using the company’s wearable cameras have made a big splash on the Internet. The company says its videos attracted more than 1 billion views in the first quarter on YouTube, where its channel has 2 million subscribers.

GoPro was founded in 2004 by Nick Woodman, who hit upon the idea while on a surfing trip to Australia. He raised his first funds to develop the camera by selling seashell necklaces along the California coast.

“There probably hasn’t been a consumer electronics brand as dominant as GoPro has been in its category since the early days of the iPod or the iPad,” Dougherty & Co analyst Charlie Anderson wrote in a note to clients.

Anderson estimates that GoPro has captured more than 90 percent of the action camera market.

Felix Baumgartner’s record-setting 24-mile (39-km) jump from a stratospheric balloon was captured using a GoPro camera. That video has attracted nearly 16 million views on YouTube.

Olympic gold medal winning snow boarder Shaun White and 11-time world champion surfer Kelly Slater are among well-known athletes who have endorsed the cameras.

Matt Egan wrote for CNNMoney that despite the strong financial performance, that growth is slowing:

GoPro’s HERO cameras represented a 45% share of the U.S. camcorder market by dollars in 2013, up from 11% in December 2011, according to statistics from The NPD Group cited in the company’s IPO filing.

However, GoPro’s growth appears to be slowing.

While the company’s 2013 revenue quadrupled to $986 million, its first-quarter sales dipped slightly. Profits declined year-over-year to $11 million from $23 million in the first quarter.

The biggest risk facing GoPro is the threat a deep-pocketed rival will develop technology that tops its imaging and memory capabilities. Tech giants like Google (GOOG) are increasingly moving into the wearable gadget space with products that have built-in cameras.

USA Today’s Matt Krantz said IPOs have been doing well this year, up 56 percent from last year:

After GoPro’s deal, there have been 141 IPOs so far this year, says Renaissance Capital. That’s a powerful 56% increase from the number of IPOs during the same time frame in 2013.

And IPOs have been seeing strong reception. The average first-day gain of IPOs this year is 14%, says Renaissance. IPOs this year have already jumped 20% from their first day prices on average.

Longer-term, though, hasn’t been as rosy as many IPOs have been fading as they trade. The Renaissance IPO exchange-traded fund (IPO), a basket that tracks the performance of IPOs over the past two years, is up 3.6% this year, trailing the Standard & Poor’s 500′s nearly 7% gain.

Whether GoPro’s shares can keep moving higher now that the valuation is caught up with the industry is the question, Preston says. GoPro’s future hinges on its plan to build a media business that sells, licenses and sells advertising against videos created with GoPro cameras owned by the company, Preston says. “People buying now think the media business will take off and be lucrative,” Preston says.

Like all IPOs, the true test will be what the stock does long term, but investors and insiders should be happy about GoPro’s performance. The company will now have to innovate and continue to generate buzz in order to keep performance rising.