Shares of GoPro (NASDAQ:GPRO) traded down 18.41% during mid-day trading on Thursday, hitting $11.92.
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Separately, recently, TheStreet Ratings objectively rated this stock according to its “risk-adjusted” total return prospect over a 12-month investment horizon. Those products sold well through the 2014 holiday season (2.4 million units in that quarter alone) and lifted the company to that year’s lofty fourth quarter revenue number. GoPro announced that it would cut 105 jobs, almost 7% of its employees, while revising its forecast revenue for the December quarter, well below its own estimates four months ago, as well as Wall Street’s.
GoPro said the preliminary take on the fourth quarter reflected lower than anticipated sales of its cameras and a price but of its Hero4 model in December.
The main culprit was disappointing sales of the Hero4 Session, an ice-cubed sized camera it launched in July. In a statement, it said laying off its workforce will incur a charge of $5 million to $10 million, which is probably for severances. Analysts polled by Thomson Reuters had projected $US512 million in revenue, based in part on the company’s downbeat guidance in October for sales between $US500 million and $US550 million.
GoPro shares had been halted for news pending after the closing bell.
The company already had lowered the ice-cube sized camera’s price in September.
GoPro, Inc. produces mountable and wearable cameras and accessories, which the Company refers to as capture devices. However, the camera-maker miscalculated when it made a decision to produce a small camera with a $400 price-tag; even chief executive Nick Woodman admitted later that it was too high.
Additionally, the company’s top media exec, Zander Lurie, is leaving his job and moving onto the GoPro board.
It will be interesting to see how the company performs in 2016, and whether it is able to continue to grow at the rate it has over the last few years.
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Ambarella Inc (AMBA.O), which provides chips used in GoPro’s cameras, fell 8.5 percent in after-market trading.
