GoPro to Leave Drone Market, Cut Jobs

Ann Santiago
January 9, 2018

All the bad news from GoPro slammed the company's shares Monday, as GoPro's stock price fell 21 percent to $5.95.

Shares of GoPro plunged by about 25 per cent on Monday (Jan 8) after it announced it was slashing its workforce and exiting the drone market following disappointing holiday-season sales. GoPro also said that would kill its Karma drone business amid poor sales and a glitch that caused the device to shut down in mid-flight and led to a recall after it debuted in late 2016.

"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".

The camera maker expects $340 million in revenue, marking a 37 percent drop from a year ago and falling far short of Wall Street estimates for about $472 million, according to an analyst survey by FactSet. In the months that GoPro was dealing with the, uh, fallout from the Karma's problems, DJI released two new smaller and cheaper drones that essentially made the Karma obsolete. The selling did subside somewhat later in the session, however, on a CNBC report that the company had hired JPMorgan to oversee a potential sale.

GoPro CEO Nick Woodman introduces the new foldable Karma drone during a press event in Olympic Valley, California on September 19, 2016. "Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier".

Due to the drone-market exit and weak demand, GoPro plans to lay off hundreds of employees. CEO Nicholas Woodman will also reduce his 2018 cash compensation to a single dollar.

Before U.S. stock markets opened, GoPro said the job cuts would leave the company with less than 1,000 workers, down from its current level of 1,254 employees.

He hoped the actions would return the firm to profitability in the second half of 2018.

It's unclear if there is an interested buyer for the company.

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