I think just a pile of stock, not the whole company, but who knows!
I’m no financial whiz, though I just finished reading Michael Lewis’s stellar Flash Boys. It is very good, about the markets and high frequency trading and things. I don’t recall any specific mention in the book, but I think if a company sheds 90% of its value it was not doing very well.
GoPro has shed 45% of its value this year and 90% since going public. And, again, I’m no financial whiz so I bought stock right before its crash but things are looking up! CNN Money has just reported that Austrian juggernaut Red Bull has just entered into a partnership with them! Let’s read:
GoPro’s stock got a much needed caffeine boost, surging 7% following the announcement.
That’s because Red Bull is getting GoPro (GPRO, Tech30) stock as part of the deal. The companies did not disclose how much or at what price.
GoPro CEO Nick Woodman touted the partnership as “very strategic” for the company, and said that “we share the same vision … to inspire the world to live a bigger life.”
Do you remember when GoPro CEO Nick Woodman inspired himself by Going Pro on a downtown LA billboard?
Dietrich Mateschitz, founder and CEO of Red Bull, added that the two companies “will amplify our collective international reach, the power of our content and ability to fascinate.”
Of course, both CEOs are using marketing mumbo jumbo to justify the deal. But it could pay off for GoPro.
Red Bull is no slouch. Forbes ranks it as the 74th most valuable brand name in the world — ahead of multinational giants Sony, Netflix, Heineken and LEGO to name a few.
Red Bull also operates its own popular online video networks focusing on action sports. GoPro has a media partnership with the National Hockey League. It makes sense. Sports videos lend themselves well to GoPro cameras.
Hockey?
But GoPro still has a lot to prove to Wall Street. GoPro lost more money than expected in its last quarter. And analysts are forecasting more red ink for GoPro this year and in 2017.
More alarming is the fact that GoPro’s sales are in a downward spiral. Revenues plunged nearly 50% in its most recent quarter.
Is that good or bad? I assume from context bad.
There are increased concerns that GoPro’s popularity may have peaked thanks to cheaper action camera alternatives from Polaroid, Xiaomi and others.
GoPro is hoping that its new Karma drone might be enough to convince Wall Street that it’s not just a one-trick pony reliant on its Hero cameras.
But GoPro shocked investors earlier this month when it said it would be delaying the Karma release until the end of this year. It was originally expected to hit shelves this summer.
Some experts have speculated that GoPro could one day be an appealing takeover target for Apple (AAPL, Tech30), Sony (SNE) or Google owner Alphabet (GOOGL, Tech30). But Woodman has given no indication that he’s willing to sell.
So the Red Bull deal may buy GoPro a little more time with impatient investors until the Karma comes out.
I think the financial writer of this story had too much fun with it but what does all of this mean? Maybe a new multichannel network? Or… I have no idea and the “marketing mumbo jumbo” really does not help. A can camera? I don’t know.
Selfie stick gopro and red bull go together like peas in a pod
That photo reminded me: what’s up with him wearing a Jedidiah shirt? Is he a Christian yank? Has he switched to Salt Life these days?
Chas. I thought Jews were good with money? Invest based on financial results rather than on ideas. ‘Ideas’ investments are only for when the idea is very new & you can get a cheap entry level investment. In 2014, GoPro shares were $90 even though they only earned 50 cents per share in 2013 & $1 per share in 2014. These are PE ratios of 180 and 90, which is way too expensive. Only insane people (aka ‘sheeple’) buy shares on super high PE ratios. For ordinary companies, you want to buy at a PE ratio of 10 and for new growth companies never more than a PE of 30. In 2015, GoPro earned 25 cents per share. The revenue was good (up 16%) but their R&D (up 60%) and marketing costs (up 39%) blew out big time. The manufacturing costs were also up 23% but it was the R&D and marketing costs that slayed them and also new issues of shares which dilute the earnings per share (EPS). The current $10 share price still looks expensive (PR ratio of 40) based on the 2015 bottom line but if GoPro could cut their R&D and marketing costs by $60M, their EPS would be 60 cents and a $10 share price would have a PE ratio of 17, which is reasonable. But OMG! GoPro made a loss of $100M for the 1st quarter 2016. Their R&D and marketing costs are simply out of control, even higher than the previous year & their revenues are 50% down. WTF is going on here!? That is my 10 minute analysis.
Which people’s do you think are good with money and which people’s not? I’d like two lists please by close of business.
people are sick of GoPro?
Hi Nick, are you back for real or just on parole? Did you and Neg’s hug it out?
PS – Do you think the GoPro R&D overspend means they’ve something spectacular in the works or just expensive failed attempts to reinvent their own wheel?
With those numbers I reckon surfstitch will want to be apart of the action, possibly the r&d is going towards camera mounted fins
Solid piece
While gopros have flooded the market with shit imagery, in the photography/production world their capabilities are insane. For what you get out of their top of the line 4 Black($500) would cost you 4 times as much from a DSLR body. Not to mention buying a water housing too. Maybe 1% of people involved in action sports should really own one, and im willing to suspect gopros sales drop has a lot to do with the fact so many barneys buy these cameras thinking they are going to get a shot of them ripping like they think they do in their heads, only to be hit with visual confirmation that they are in fact styleless fuck wits. All I can say is i love gopro as a company and have used their products for a long ass time. They supported my sport and saved our Pipeline contest when the IBA dropped the ball. But really they sold everyone on the dream that buying their camera would capture that super sick barrel or insane powder line. The only problem is that barrel is always just a head dip and most people dont leave the groomers…
Bravo.
That was put much more nicely than mine, I appreciate the professional take but glad we basically agree.
Well im in agreement about shit imagery for sure, but i do love my GoPros. i need their stock to stay up considering they cut me a $500 check for one of my shots last month. Id like to keep that gravy train rolling hahaha
Too true… i wish everyone could see footage of themselves to show where they sit in the food chain.
My two least favorite “action sports” brands. One pumps poison down our kids throats and the other is the vehicle for pumping narcissistic shit imagery all over the web. Hope your stock burns in hell.
Now I want a Cardiff Crack sandwich…maybe I’ll put a GoPro at one end of the roll and film myself eating it.
Whatever journey you go on to destroy these companies, remember the silent majority stands with you. Godspeed brother.
Alas, I am but one man. Thank you brother, I do what I can.
You read a whole book about the stock market? That sounds even harder than reading all 10 of Laird’s secrets to immortality.
Who gets the property on Ke Nui Road?
“Austrian juggernaut”? I saw no mention of Arnold… wait, you’re secretly a Diplomacy nerd! I thought The Juggernaut was Russia/Turkey alliance, no?
The diplomacy nerdiest! The juggernaut was Russia/Turkey until Dietrich Mateschitz went to Thailand. It was Austria/Thailand for a second but then Thailand refused to wear Red Bull branding on its head for all interviews so now it is just Austria.
Layered. Fuck, board games are complicated these days…