June 15 - Jitan Solanki
Discover the top three scenarios to short a stock.
Company: GoPro is the company that made showing vacation footage to your hapless dinner guests a thing again. Founded in 2002, the company made sports action cameras that quickly moved beyond a niche market to become the best-selling cameras in the world. It then went public in 2014 as one of the hottest IPOs of that year.
Leadership: Founder Nick Woodman, who came up with the idea for GoPro in his mid-twenties and started selling the cameras to surf shops from his van, is still in charge.
We know the market loves founder-run companies. A study of S&P 500 companies shows founder-run companies tend to be more innovative and outperform the rest. But with growing pressure on GoPro, we do wonder if Woodman might get replaced with a new CEO at some point…
Main moneymaker(s): Its Hero action cameras. It’s trying to convince people the cameras aren’t just for daredevils and adrenaline seekers – that they’re, in fact, for everyday use.
Competition: While GoPro continues to be the top-selling brand, the action camera market is getting more and more crowded. Plus, smartphones have some pretty spiffy lenses these days.
Revenue: US$1.6 billion in 2015
Red Flags: Its ability to launch new products successfully has been called into question – in 2016, it had to deal with product recalls and production delays. Some are also wondering if the company can innovate fast enough to stay ahead of rivals that are breathing down its neck like a hungry zombie. Doubts about GoPro’s growth and future have made the stock rather volatile.
Future Bets: The company is trying to avoid being a one-hit wonder by introducing new products, like the Karma drone. It’s also moving beyond hardware to services, launching a cloud platform that allows people to upload, edit and share moments captured on their GoPros much more easily. In addition, it’s showing grand ambitions to become a media company, which means it can potentially make money from content in future and be less reliant on camera sales.
Fun Fact: GoPro was once sold on QVC, that American home shopping network which bored housewives watch for product demonstrations of potato peelers and air humidifiers. We all gotta start somewhere…
Trade GoPro with BUX now!