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GoPro Continues to Trade below Its IPO Level

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Dec. 3 2015, Published 11:08 a.m. ET

GoPro continues to trade below its IPO level

In 2014, GoPro (GPRO) came out as one of the fastest growing companies after it went public. Its price rose more than 100%. Investors drove the price to $93.0 in September 2014. However, this year remained uneven for GoPro. Its price hovered around its IPO (initial public offering) level of $31.0 in September 2015. Currently, it’s trading below its IPO at $20.13.

GoPro shares rose 31% when the company made its debut in 2014. Even with that bounce, investors wondered whether the company could give tough competition if its peers came up with low priced products.

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What made GoPro fall?

The actual hit occurred when Apple provided a camera-related patent that drove the price down by 12%. Also, when Apple revealed its iPhone 6s specifications, the price fell again. The iPhone’s camera captures clearer pictures than GoPro’s HERO4 Session. Unlike GoPro, the iPhone 6s isn’t water resistant. It can get damaged due to its soft layer.

The company underperformed in its fiscal 3Q15 earnings. It reported revenue of $400 million. It missed Wall Street analysts’ estimate of $433 million. The EPS (earnings per share) came in at $0.25—compared to Wall Street analysts’ estimate of $0.29. The reason for the losing consensus was low demand for its waterproof camera HERO4 Session. It launched in mid-summer. Also, the company doesn’t have any product in the pipeline to lure adventure seekers and sports enthusiasts this holiday season.

The iShares Russell 1000 ETF (IWB) is a portfolio of 1,038 stocks. Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and GoPro account for 3.3%, 1.9%, 1.0, and 0.02% of IWB, respectively.

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