GoPro: Still A Disaster

When a fad ends, rarely does the positive buzz return, making a rebound in sales very unlikely. That is the case for GoPro (NASDAQ: GPRO), whose stock fell by one-quarter in the last month. Negativity heightened after the company reported fourth-quarter earnings of -$0.30 (loss) a share. Revenue fell a substantial 38.1%.

Chances are low that GPRO stock will ever recover. Unless it finds a buyer for its camera technology and rugged design ideal for sports and adventurous scenarios, the stock will keep falling. The downtrend in GoPro’s business is also putting pressure on Ambarella (NASDAQ: AMBA).

AMBA is developing CV1, or computer vision technology. It is pivoting its business from supplying chips to GoPro to developing advanced solutions for the autonomous driving market.

Apple (NASDAQ: AAPL) could be a bidder for GPRO stock. At well-below $1 billion, GoPro’s culture matches that of Apple. GoPro has a powerful brand and a good, niche product. Its only headwind is failing to convince the user-base to upgrade to the latest device.

A management cleanup and a CEO replacement, where Woodman is currently in charge, could open the doors for inviting a bigger company to bid for the company.

Takeaway

GoPro has many shareholders deeply underwater on the stock. But at these levels, GoPro looks like a good takeover target.