GoPro's Karma Drone Gets Grounded

11 January, 2018, 09:19 | Author: Nina Hammond
  • Gopro, Inc. - GPRO - Stock Price Today - Zacks

GoPro is planning to re-structure through an $80 million cost-cutting program, which will see least 255 employees lose their jobs to achieve a headcount of "fewer than 1,000 employees worldwide".

The company also intends to shrink its workforce by laying off about 20 percent of its workforce. Over the last ninety days, insiders have sold 704,907 shares of company stock valued at $6,478,800. The company also announced the end of the drone era and the company's official departure from the drone industry. "There's significant demand for GoPro at the right price", Woodman said. "After trading resumed, the shares fell further, and the stock was down 30 percent by 10 am".

Management has already hired JPMorgan Chase to facilitate discussions, according to CNBC sources, but whether buyers have yet come forward remains unknown.

Nick Woodman, the CEO of the action camera manufacturer stated that the company would consider a sale or partnership with another company, but the firm's intention would be to remain independent.

"Although Karma reached the number two market position in its price band in 2017, the product faces margin challenges in an extremely competitive aerial market", said GoPro in an earnings report.

More news: Teacher handcuffed after speaking out about pay at Louisiana school meeting

GoPro's HERO5 camera line-up significantly underperformed during the holiday quarter, and the company ended up slashing $100 off the price to generate sales. The company admitted in its preliminary fourth-quarter results (2017) that it was facing financial troubles as it declared that it would lay off staff and would even cut the CEO's salary to cover up for the losses.

GoPro (NASDAQ:GPRO)'s stock had its "sell" rating reiterated by analysts at Dougherty & Co in a research report issued to clients and investors on Tuesday, reports. 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.

In a sign of troubled times ahead, camera maker GoPro has made a decision to cut 20 per cent of its global workforce.

In an announcement to the market, the company said it has lowered the price of its premium model, HERO6 Black, from $US499 to $US399 "to align with its good, better, best product strategy".


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