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GoPro Stock Rose on Acquisition News

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GPRO rose 7.8% last week

Shares of consumer technology company GoPro (GPRO) rose 7.8% in the week that ended on April 13, 2018, to close at $5.26. GoPro shares have generated returns of -39% in the last 12 months and -6.6% in the last month after falling 13% in 2017.

The stock is now trading 19% above its 52-week low of $4.42 and 56% below its 52-week high of $11.89.

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GoPro could be acquired by Xiaomi

GoPro stock rose 8% on April 13, 2018, after several websites reported that it might be acquired by China’s (FXI) Xiaomi. GoPro’s CEO, Nicholas Woodman, stated that the company was open to an acquisition and had hired JPMorgan (JPM) to look for potential buyers.

The acquisition could be valued at $1 billion, which is higher than the company’s current valuation but significantly lower than the $10 billion figure the company reached when it was trading at over $80 per share. GoPro has been struggling with falling device sales. Its shipments fell 40% YoY (year-over-year) in 4Q17.

Analysts expect GoPro’s revenue to fall almost 16% YoY in 1Q18 and 8.2% in 2018. GoPro has tried to stimulate demand by slashing product prices, and it remains to be seen whether this move will result in sales growth. GoPro’s profitability has also been severely impacted by falling device sales, a development that has concerned investors regarding its long-term sustainability.

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