Camera maker GoPro Inc. is getting out of the drone business, laying off more than 20% of its workforce and losing two executives after predicting a sharp decline in its fourth-quarter revenue.
Tracey Lien of the Los Angeles Times had the news:
The disappointing outlook sent shares plummeting nearly 30% to an all-time low of $5.32 in morning trading Monday. They then recovered somewhat; shortly before 1 p.m. Pacific Time, shares were down 13% at $6.54. The company went public at $24 a share in June 2014.
The company announced on Monday cost-cutting measures that it said would help it save $80 million. Among them are slashing its global workforce from 1,254 employees to fewer than 1,000; reducing GoPro Chief Executive Nicholas Woodman’s cash compensation to $1 (it was $800,000 in 2016); and ending production of its aerial drone, named Karma.
GoPro’s chief operating officer, Charles Prober, will leave the company Feb. 16, and its senior vice president of corporate development, Sharon Zezima, is resigning effective March 30, according to a company filing with the Securities and Exchange Commission.
Casey Newton of The Verge reported that the company is open for a sale:
GoPro founder and CEO Nick Woodman told Bloomberg Technology that “I can confirm that JPMorgan is in fact our banker, but we have not engaged them to help us sell the company.” He said that GoPro was potentially interested in selling, but not actively searching for a buyer. “If there were an opportunity for GoPro to partner up with a larger organization that could help us scale the company,” he said, “that’s certainly something that we would consider. But it’s not something that we’re actively engaged in at the moment.”
This expands upon an earlier statement Woodman made to CNBC. “If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at,” he said.
GoPro was valued at $3 billion after an initial public offering in 2014, but declining revenues in its core camera business, and unprofitable efforts to explore lines of business in drones and video-editing software, have left it open to attack.
If GoPro is selling, it’s unclear which companies may bid on it. The company’s market capitalization has fallen to about $1 billion as of Monday afternoon.
Alex Sherman of CNBC.com reported that it’s unclear whether anyone is interested in buying GoPro:
J.P. Morgan helped underwrite GoPro’s initial public offering in 2014. No sale is assured, said the people, who asked not to be named because the discussions are private, and GoPro is not in any active talks with a buyer. It’s unclear if there is an interested acquiror for the company. GoPro declined to comment.
GoPro CEO Nick Woodman CNBC earlier Monday that the company would consider a sale or partnership with another company, though it plans to remain independent.
“If there are opportunities for us to unite with a bigger parent company to scale GoPro even bigger, that is something that we would look at,” Woodman said.
Shares of GoPro were down 19 percent in midday trading Monday, after the camera maker said it was laying off about 20 percent of its workforce and lowering guidance after a weak holiday season.